The dangers of collectivism haven't passed

Soviet-style central planning might have collapsed, but the enthusiasm for redistribution has not, making The Road To Serfdom just as pertinent now as when it was published 70 years ago, writes Julie Novak.

Friedrich Hayek's warnings about the dangers of collectivism remain as relevant in 2014 as they did in 1944.

This week, 70 years ago, Friedrich Hayek's book The Road To Serfdom was first published in the United Kingdom. Dedicated "to the socialists of all parties", the book quickly became a bestseller with five reprints within 15 months in the UK, and with US sales in the first six months exceeding initial expectations 10 times over.

Some 400,000 copies of The Road to Serfdom have been sold in the United States alone, and in the aftermath of the global financial crisis, the book came first on Amazon's bestseller book list.

The popularity of the book may have surprised Hayek, but it is not surprising that his warnings about collectivism bringing about a loss of liberties resonated with many people during World War II, and even through to the present era with its macroeconomic controls, welfarism, regulatory obstructions, and lifestyle paternalism.

A central theme of Hayek's The Road to Serfdom is that extensive economic interventions by government suppresses the ability of individuals to make their own choices, and this leads to several dire consequences.

Under any mode of economic organisation, the challenges of resolving what, how, when and where to produce and exchange goods and services unavoidably presents itself.

Markets allow such economic decisions to be made to the mutual benefit of buyer and seller. Without any grand plan, individuals coordinate with, and learn from, other people about ways of efficiently allocating scarce resources and satisfying the desires of consumers.

Importantly, all this market coordination and learning is undertaken in a decentralised, 'bottom-up' fashion, through changes in relative prices and adjustments to profits and losses.

The alternative is for the problems of economic life to be addressed through political processes, in which the competitive striving of market players to satisfy others is ameliorated, or replaced, by centralised, 'top down' determinations as to how resources will be allocated.

When Hayek wrote the first edition of The Road to Serfdom in 1944, this central planning was equated with socialistic political attempts to comprehensively, and directly, control production processes, supplanting markets as the prime means of economic organisation.

For Hayek, this manifestation of socialism was a grave threat because:

Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy. And an authority directing the whole economic system would be the most powerful monopolist imaginable.

Importantly, Hayek also pointed out that central planning socialism cannot distil the economic knowledge needed to ensure that resources are allocated to their highest valued uses.

Hayek advised it is possible for nations to avoid central economic planning and political totalitarianism, and to even bring themselves back from the brink of socialism, but he equally warned of severe consequences from the dalliance with interventionism in the Western world.

As he indicated in the preface to the 1956 edition of The Road to Serfdom:

The most important change which extensive government control produces is a psychological change, an alteration in the character of the people.

Nowhere is this problem more apparent than in the area of government welfare policy.

Treasurer Joe Hockey, in his 2012 'End of The Age of Entitlement' speech, stressed that proliferating personal subsidies and transfers not only threaten a return to sustainable budgetary outcomes, but hamper economic growth and productivity in the long run.

But the deeper problem seems to be that people no longer perceive getting, begrudgingly, a portion of other people's incomes, through government force, as a strictly temporary, and preferably avoidable, backstop if they find themselves in catastrophic situations.

Today, more people apparently view helping themselves to others' money as their "welfare entitlement", a situation recipients resolutely defend when reasonable calls for their reform are expressed in the public domain.

Even as Soviet-style central planning collapsed, and Western socialist parties surrendered their ambitions to directly own entire industries, the widespread enthusiasm for redistribution remained unabated and, if anything, has grown with relish in time.

But as Hayek noted in the late 1970s, the welfare state in no way diminished the basic thrust of The Road to Serfdom, explaining, "Some parts of the present welfare state policies - the redistribution aspect of it - ultimately lead to the same result: destroying the market and making it necessary ... gradually to impose more and more central planning."

Nobody but the most ardent socialist would have imagined, in 1944, that government fiscal activities, predominated by welfare transfers, would account for the 35 to 50 per cent of national income that Western economies experience today.

Nor could they have envisaged the extensive web of regulations ensnaring individuals and businesses within an ever-decreasing ambit to undertake discretionary actions, and exercise their own choices.

In Australia, we should take Hayek's wise advice and sharply reverse our journey toward the final hellish destination on the road to serfdom.

Dr Julie Novak is a senior fellow at the Institute of Public Affairs, based in Melbourne. View her full profile here.

Comments (380)

D.G.:

12 Mar 2014 4:08:27pm

If you Libertarians are so convinced that you have all the answers, how about you put them to the test. Stop relying on corporately subsidised think tanks to promote your preferred policies. Try actually competing in the marketplace of ideas. Run for office, and see how far you get.

Kitty9:

Fred:

12 Mar 2014 5:00:53pm

Since when does the IPA even deserve the title 'think tank'. It does not do research like a traditional think tank, it is merely a propaganda outlet.

When you have a 'libertarian' like Chris Berg arguing more strongly about the need for Rupert Murdoch to have the right to a monopoly in the Australia media than about Edward Snowden's exposure of our Stasi society, it is clear that they are not even true libertarians. A true libertarian (like Ron Paul) would be cursing the Stasi-NSA and their puppets in the UK and Australia with every breath. A true libertarian would be far more concerned with the fact that increasingly, every aspect of our lives is recorded by governments and corporations, than with what Rupert Murdoch wants to buy. A true libertarian would be opposed to corporate monopolies, for monopolies limit choice. A true libertarian would be outraged at the rigging of gold markets, interest rates and currency valuations by a collusion of big banks. Clearly, people like Berg (this author isn't even worth mentioning, she's a joke) are NOT LIBERTARIANS.

Stop Chris B:

Stop using my society, which is based on the goodwill of lots of average people, to guarantee the big Australian Banks so they build a housing asset bubble to line the pockets of the rich.

Yes there needs to be limits on welfare and we could do with a lot more philanthropy in Australia but libertarians are way off course with their calls to eliminate welfare as thinly (very thinly) disguised social darwinism.

Henry the Moose:

13 Mar 2014 9:08:47am

In response to Kitty9's rather innocuous comment in which she\he stated a fact about tax deductions, you have produced an unkind character assassination which ought never to have got past the moderators.

Intellectually bereft people never appear capable of applying their principles to themselves.

Stuffed Olive:

Johno:

RC:

13 Mar 2014 2:06:05pm

Ever since the bonds of serfdom were broken in 1215 with the advent of the Magna Carta, feudalists, their descendent capitalists, and now the neo-feudalist oligarchs, have been trying to turn the clock back so that "nirvana for the few" may arise on the back of the sphynx. "Beggar the "rest"" - that's US - is their consistent battle cry.It's no wonder that Socialists everywhere talk about the existence of Class Warfare. "What about the Workers, mate"?The oligarchs' swift response - "buggar 'em, how could they exist with out us" (them)?"Afterall we're the reason they subsist."Whose side are "you" on?

D.G.:

12 Mar 2014 4:49:20pm

Totally legitimate for corporations to fund them, but they don't have to take the money. Isn't it demeaning for people who preach self-sufficiency to have to rely on handouts? (And that funding is a handout - it's not like the IPA actually produces anything useful in return).

RayS:

It would be hilarious if it wasn't ridiculous and pathetic to claim we are all headed for serfdom through redistribution of wealth.

The reality is the rich are richer, more numerous and further separated from the rank and file citizenry than was ever the case throughout history.

The author, Novak, reminds me of another journalist, at the Herald, Paul Sheehan, who wrote that human rights activists were narcissists.

These people presumably know the meaning of the words they use, yet they have such contempt for their audience that they use any word that can have a negative inference, even if the word is incompatible with reality or their own arguments.

So, the word narcissist which implies self interest is used to demean human rights activists who by definition are acting in the common interest, and the word serfdom which means multitudes of all peasants or lower class is used to describe a reality in which the separation between "peasants" and their "betters" is vast and wide, getting vaster and wider.

Hayak is proven wrong and could not be more wrong in the light of his ludicrous prediction and what has really happened.

HPH:

"Very little evidence of any deception in that article. Dr Novak's agenda hits you right between the eyes."

Bulldust! Here is the deception, Robert:"Markets allow such economic decisions to be made to the mutual benefit of buyer and seller."

Markets only offer "buyers" ranges of products to choose from over which they have no democratic choice. Worse still, it uses advertising to make them think they can fulfil their deepest spiritual needs by buying material commodities. Also there is evidence of slavery in different stages of the supply chain from the production of raw materials, to manufacturing goods when the product reaches the market.

ratatat:

Kerry:

13 Mar 2014 12:38:07pm

"Markets allow such economic decisions to be made to the mutual benefit of buyer and seller. Without any grand plan, individuals coordinate with, and learn from, other people about ways of efficiently allocating scarce resources and satisfying the desires of consumers.

Importantly, all this market coordination and learning is undertaken in a decentralised, 'bottom-up' fashion, through changes in relative prices and adjustments to profits and losses."

Absolute rubbish. I suppose the Great Depression of 1929 and the GFC were caused by those sneaky Socialists rather that those upright and honorable Capitalists.

These simplistic ideas work well for 'Trickle Down Economics' - for those whom it trickles down from, not so much those for whom the dregs are supposed to trickle down to.

paulinadelaide:

12 Mar 2014 6:16:36pm

And what is wrong with the US? It may have 30m poor people but that's about the same in % terms as OZ. You saying all that welfare we have and yet we have the same level of poor??BTW the very rich in US are Very rich but it's a massive economy.

HPH:

12 Mar 2014 7:37:23pm

Paul,Free-market capitalism is the greatest threat humanity has ever faced.

Economic theory teaches that free price and profit movements ensure that capitalism produces the greatest welfare for the greatest number. Losses indicate economic activities where costs exceed the value of production, thus investment in these activities is curtailed. Profits indicate economic activities where the value of output exceeds its cost, thus investment increases. Prices indicate the relative scarcity and value of inputs and outputs, thus serving to organize production most efficiently.

This theory doesn't work when the US government socializes cost and privatizes profits as it has been doing with the Federal Reserve's support of "banks too big to fail" and when a handful of financial institutions have concentrated much economic activity. Subsidized "private" banks are no different from the former publicly subsidized socialized industries of Great Britain, France, Italy, and the former socialist countries. The banks have imposed the costs of their incompetence, greed, and corruption on taxpayers. Indeed, the socialized firms in England and France were more efficiently run and never threatened the national economies, much less the entire world, with ruin as do the private US "banks too big to fail." The English, French, and socialists never had to print $1,000 billion dollars annually to save a handful of corrupt and incompetent financial enterprises.

This only happens in "free market capitalism" where the capitalists, with the approval of the corrupt US Supreme Court can purchase the government, which represents them and not the electorate. Thus, the taxation and money creation powers of government are used to support a few financial institutions at the expense of the rest of the country. This is what is meant by "markets are self-regulating."

Toc:

13 Mar 2014 12:49:03am

Adam Smith thesis was that in an ideal market where buyers and sellers have perfect knowledge, rational self-interest and where there are many buyers and sellers the best price possible for all will eventuate.An ideologue might think that our capitalistic economy is an ideal market, but in truth this is only when compared to a totalitarian command economy, which by the way worked very well in war time.I posit, that we can include in our ideal market, systems which don't exist, analyse them rationally and chose between competing systems as to which will give the best outcomes for all. We have no choice as we cannot do this as an experiment though we can look at failed economies to see where they went wrong. We can therefore, as both buyers and sellers, because most of us are, (you sell your labour), analyse different systems without actually living through the dire consequences of extreme systems.Generally the West has chosen mixed economies as the best method of providing the best outcomes for all.If we were pure capitalists we would not have socialised the losses of the GFC. That I have to agree with. I'm not sure very many of us would have liked a collapse of the banking system. Maybe, we need financial Nuremburg Trials.I think we should be wary of people who espouse a pure "free market" as the system which will give the best outcomes, because the free market is not necessarily or even generally Adam Smith's ideal market, as much as we should be wary of those who espouse a purely socialistic system.

So, economic theory does not teach that free price and profit movements ensure that capitalism produces the greatest welfare for the greatest number, unless it is also coupled with perfect knowledge and rational self interest. There is a subtle distinction here. We may rationally decide to forgo a cheaper price, simply because the cheaper product, is dangerous. We punish people for selling illegal drugs because we think our society suffers through their use even though the sellers make a lot of money. These are only simple examples. We can decide that it is better for the nation to own say, the railroads collectively because it works for most better that way. We, as consumers of transport options, and as providers through our ownership of the state, can make that decision, and it does fall under Adam Smith's theory, but not under that of pure capitalism. We as owners and consumers of again. say the railroads, may accept losses as having a beneficial effect on our selves. Rational self interest enables us to do that if indeed it is the case.

Value is not just about money, but even so there is no real evidence that pure unadulterated capitalism is good for the greatest number. But the some of the rich perceive that it is good for themselves and some who think they might and would like to become rich, agree.

Kanooka:

Are you trying to say that the very rich in Australia are not as rich in real terms as the very rich in the USA? The worlds richest woman is an Australian and will continue to become wealthier.

Comparative to the "average" citizen here our wealthy are quite ok thank you, even if they do begrudge paying their rightful share of taxation.

I have seen the differences in standards of living poor people in both countries and to claim that we match the US in the very poor is just a fallacy, one rarely sees beggars on street corners in regional and major cities here, unlike the USA where it is common place. At least we have a social security system that provides some support and a health service available to all.

As an advanced economy both in terms of wealth and compassion Australia leaves the USA for dead. God help us if we ever become as focused on the almighty dollar and profits as the Americans.

kpdavis:

13 Mar 2014 4:46:01am

paulinadelaide: Speaking as an Australian now living in the US, you have no idea. The wealth inequality in the US is much larger than Australia. Socialising costs while privatising losses is not just about the banks that are "too big to fail", it is also about the working poor, who are in full-time employment yet still rely on food stamps to make ends meet. So employers have effectively shifted wage costs to the taxpayer. Note that living costs are generally significantly lower than Australia, so what does that tell you about their wages? It is about a culture of tipping (current standard is 20%) to shift the business risk onto employees (if a restaurant's business is slow, it is the waitstaff who lose out, not the business owner). Do you really want to go down that path in Australia?

btw this isn't a permanent move for me, I fully intend to come back home in a few years. Although Norway is looking attractive right now...

Cafe:

13 Mar 2014 7:52:59am

I am in the same situation kpdavis. Funnily enough, Norway does look attractive :)

It pains me to see the results of unfettered capitalism right here in the USA and see the same garbage being spruiked by the likes of the IPA in Oz. If people could experience living in the US, which has gone the furthest down this capitalism route...they would see first hand the shortcomings and the morally bankrupt results of this approach.

Walmart workers being asked to donate food to their fellow workers so they have a good Christmas. Health care costs being the number one cause of personal bankruptcy. Five, count them, five beggars on one intersection in the small city I live in. People being forced out of their homes because the bank "securitised" gambling got a little out of hand a few years ago. The disappearance of pension funds as the money was gambled away on derivatives and shonky investments.

But worst of all is the effect it has had on the concept of a civil society here. The place is dog eat dog and inter-personal trust and goodwill is ebbing away at an alarming rate.

But hey, the 1% are doing quite nicely now that the government has been bought.

Bev:

I think I think:

12 Mar 2014 7:55:41pm

A place in which large numbers of people, especially political prisoners or members of persecuted minorities, are deliberately imprisoned in a relatively small area with inadequate facilities, sometimes to provide forced labour or to await mass execution. The term is most strongly associated with the several hundred camps established by the Nazis in Germany and occupied Europe 1933?45, among the most infamous being Dachau, Belsen, and Auschwitz.

With the exception of forced labour, neither of which are required in the Oxford definition above, that sounds exactly like Manus.

Pete:

13 Mar 2014 2:32:52am

"corporate funded propaganda such as from the IPA should be investigated and outlawed"This is exactly the lunacy that Hayek warned about. What you're really saying is 'corporate funded propaganda' you don't agree with should be outlawed. The source of the funding is almost irrelevant, as long as it's disclosed (which it is in Australia, although there's always room to tighten this up). The idea of individuals funding all discourse is inane. I understand the problem your trying to solve, but the right way to address 'unearned' influence is to promote free speech, not to stifle it, or limit its applicability to certain groups.You can disagree with corporate propaganda - most individuals including myself do - but I bet you haven't considered the disastrous unintended consequences of shutting it down: elites (left or right-wing) deciding who can communicate and who can't. And by the way, the IPA is a lot more than a corporate funded propaganda outfit. They take a dim view of any restrictions they perceive to limit freedom - admittedly their version of it, but it's a lot broader than just the view of corporations.

CF Zero:

Mark James:

12 Mar 2014 9:49:29pm

"It is perfectly legitimate for corporations to fund whatever they like with their money"?

Not necessarily, Ben.

The British arm of Murdoch's News Corp, for instance, funded the illegal hacking of people's phones, including a murdered schoolgirl, and the illegal payment to public officials. So, while it's true to say that News Corp did fund whatever they liked with their money, it's also true to say that they did so illegally.

I'm not a lawyer, but I'd say it is most certainly not 'legitimate' to fund something that may be illegal.

Henry the Moose:

13 Mar 2014 9:17:14am

"It is only government spending that should be scrutinised and (hopefully) reduced."

Which is not a libertarian perspective either. Large corporations can present an actual threat to democracy and to the economy, which is why there are laws designed to limit the reach of corporate influence - at least historically.

Very large corporations should indeed have their spending scrutinised to ensure that it complies with laws and delivers its shareholders honest and accountable corporate governance.

We have entered a twilight zone where people on the right, who historically were libertarian are now, in essence, championing laissez-faire capitalism, with the bizarre sight of people riding to the defence of billionaires and their large corporations, in an effort to free them from any semblance of regulation or oversight.

Tom1:

LeftRightOut:

13 Mar 2014 12:31:26pm

Ben

Again you are correct. We should stop the government investing in any form of research. Let the market decide everything about the economy. Who cares if they have vested interest. Who cares that protecting people or the environment is not profitable.

As with many aspects of life, balance is important. The article idenitfies innovation as important to economic success. This is very true. However not having controls in place may see technologies advancing that have deterimental effects.

The other side is that in an ever increasing global market place, many are taking shortcuts to achieve results. Classic examples would be in the IT world where software requires constant patches because they were not thoroughly developed or investigated in the first instance. Medicines are another area where shortcuts are being taken to be first to the market. Unlike the IT issues, side effects of certain drugs can be lethal. This is where government regulation is important.

A further point on innovation is how much is initiated through defence programs. Currently defence is paid by governments. Much of modern technology would not exist without this spending.

Finally, there is research for the purpose of research. This is rarely funded by business as it is expensive and often doesn't produce a marketable product. Knowledge is gained but often with minimal economic value unless taken further. This research often does enter the marketplace through other parties identifying potential.

Peter the Lawyer:

D.G.:

12 Mar 2014 5:39:45pm

Funny thing about the LDP, in South Australia at least. They have all these wonderful ideas for how to improve the country, but the one and only policy they promote on their election posters is marijuana legalisation. For all the Hayek-inspired genius of their platform, they think their best shot at a Senate spot is picking up votes from people too high to find the actual pro-marijuana party on their ballot.

MDG:

12 Mar 2014 8:22:32pm

I thought they had one Senator-elect, and owe that fact to a combination of having the word "Liberal" in their name and the luck of scoring the left-hand column on the comically-long NSW Senate ballot paper.

Halifax pilot:

Colmery:

12 Mar 2014 4:45:04pm

Good point D.G.

However, that criticism could be levelled at any comment that drifts either side of the boundary of what the largely disengaged electorate take to be where the political football can bounce as the enthusiasts flail about tying to impress the selectors.

Maybe a better challenge is a poll to find out if the ABC audience supports the inclusion of groups like the IPA, which openly profess an ideology not just outside the field of play by Australian Rules, but belonging to another nation entirely.

MuZZ:

12 Mar 2014 4:54:35pm

that's exactly what i reckon, let the market- ie the electorate - decide between the -here ya go, give it your best shot and -here you are , we are the best shot parties......hang on, there already is the greenies, er watermelons; the group for income redistribution and socialist intervention in everything, yup, 10% have given them a go, can't quite see it going much further than that, so far about 90% see right through that lot.

But the point is, independence is at stake! Let that fruity bunch decide your future or have the choice to decide yourself, or let the socialist left, aka ALP/ACTU paint your rosy future - and their interest in your general welfare is obvious ain't it.

Robert of Lindsay:

12 Mar 2014 4:56:37pm

And these same flogs are the first to whinge about not having enough conservative voices being heard on the ABC.

Go figure......

I find this paragraph gob smacking in its hypocrisy

"But the deeper problem seems to be that people no longer perceive getting, begrudgingly, a portion of other people's incomes, through government force, as a strictly temporary, and preferably avoidable, backstop if they find themselves in catastrophic situations."

Many people put into a position of asking for a government "backstop" have generally been paying taxes, despite the right wing delusion that anybody who gets welfare has never worked a day in their life. So where do they then come up with the idea it is someones else money? Isn't a social safety net one of the principle reasons we pay tax in the first place?

I find it deeply hypocritical because a few short weeks ago we had the conservatives falling over themselves to hand money out to their farming constituants, while still persisting with this insane idea to hand out up to $75K to the professional housewives on the North Shore if they have a child.

Hockey hasn't ended the Age of Entitlement at all. All they have done is shifted it's focus to people more inclined to vote for them.

The Age of Entitlement is certainly alive and well in private industries like mining and tobacco. Whilst crying poor mouth about our "draconian" tax system they can still find enough money to fund "Institutes" like the one our venerable author belongs to. I'm more concerned MY taxes are given to these companies in the form of tax concessions so people like our venerable author can produce such propaganda dribble.

It is one of the more distasteful traits of the right wing media whores in this country. They'll begrudge anyone not in their circle a single cent, whilst happily gorging themselves sick.

Diogenes:

12 Mar 2014 5:13:46pm

Actually your para supports the argument of the article. I no longer listen to classic Fm because of the world music/modern rubbish and movement of talk progams to when I want to listen to music, I no longer watch ABC tv for may reasons and only use the ABC news website because it is"free". I don;t listen local or national as I don;t like being hectored at & would rather crawl naked over broken glass then listen to JJJ

Yet the government takes my money & gives it to a media organisation that has a reach like no other.

JohnnoH:

Reagan Country:

12 Mar 2014 8:36:20pm

Sorry JohhnH, the facts are that in July 2013, News won a case in the Federal Court against the ATO regarding the ATO's assessment of the tax deductibility of currency exchange losses dating back to 1989 and 1991. The losses were booked in 2000/01. The Federal Court found the ATO's assessments for the currency exchange losses were excessive and the ATO did not appeal, resulting in an $882m cash payment to News, including interest.

So the ruling was made during the period when the ALP was in office and based on transactions that occurred when the ALP was in office that were booked when the LNP was in office. The payment was made when the LNP was in office because that's when the payment had to be made and the LNP just happened to be in office at the time. And in such matters the ATO is independent of the government, regardless of whether it is an ALP or LNP government.

Whitey:

13 Mar 2014 3:18:43am

Robert, firstly, public servants get a very substantial PPL even now, do you think that should be abolished? Secondly, the farmer payments do meet the criteria of being temporary, and yes people on low incomes do pay some form of tax, even if it is only GST, but are nett users of tax dollars, and pay no nett tax. Business also helps fund progressive think tanks, as well as the IPA, and some of them also get substantial public funding.

ratatat:

James Murphy:

12 Mar 2014 9:01:52pm

Armed forces (or equivalent government funded bodies) have the capability, procedures, training, and equipment to conduct effective search and rescue operations at sea. As it is, airlines are either directly, or indirectly, a source of tax revenue in each country they operate in...

Even if it was a communal S&R service funded by every airline, an effective global network of S&R people and equipment would be ridiculously expensive. Obviously you would be willing to pay a lot more for your flights, knowing that on the most rare of occasions when such services are required, they will be available - probably underfunded, and badly trained, but available nonetheless.

Are you sure that no private aircraft or vessels are involved in the search? As you're obviously so well informed, then you could share a list of everyone involved in the operation?

Also, costumers? This is the first I have heard about costumers being on-board... whose costumers were they? what sort of costumes? This is very intriguing...

godbothered:

But hang on a second, don't you guys always harp on about how private enterprise is ALWAYS more efficient and that governments struggle to run a chook raffle properly?

It seems as though, in this case at least, someone from the right does acknowledge (finally) that the notion of private enterprise being inherently more capable and efficient simply because it is not the (so called) dead hand of government is, to quote one T(ea Party) Abbott, "absolute crap"!!

gbe:

12 Mar 2014 6:25:22pm

Why do people like to complicate things so very simple if you have something to sell that some one trades or pays for it you have a business if some one does the same thing at a price you can't match you don't have a business.

Does it Sound Simplistic yes because that what life is very simple people just love find a ways to complicate it.

rusty cairns:

12 Mar 2014 8:57:02pm

GDay gbeThere is a problem, that some will sell the product at a loss, just to destroy the others business.Luckily there are laws that try to prevent this, if not you could expect just a few worldwide corporations would be making and selling everything, and any competition to them destroyed.Is patent law one that should go ? Certainly in some cases like vital medicines this should be the case.I understand that a lot of money can be spend developing these medicines but shouldn't that money spent be seen as efforts to benefit the people of the world, not as a way for some to get rich quick ?

Todd:

12 Mar 2014 9:09:43pm

Or, of course, DG, collectivises like you could try to emulate a state like North Korea that jealously guards its collectivism. The reason people like myself are Libertarians is that I do not want economic and social ideas of others foisted upon me, thereby reducing my right to self determination. So, you can think one way, I can think another, without one having to force the other to change their thinking. That is, if you don't like AWA's, don't sign one. I don't like Unions, so I shouldn't have to pay Union dues. But I would NEVER advocate taking away your right to line the pockets of Uion officials, no matter how sad I may find it. The welfare state, unfortunately, affords no such freedom. That is, taxes are compulsorily taken from me, without any choice as to how the money is spent. Foxtel in prisons? I say, let lefties donate for such initiatives. I would rather my money go other needy people, like law abiding Single Parents. Some welfare is required, do not get me wrong, but for such a massive amount to be spent, I believe there is a need for more individualism, that is, less transfer payments.

On the social side, again, freedom is the key. If I want to smoke, I should be able to without the imposition of lifestyle taxes like tobacco excise. Same with alcohol. Soon to be the same with sugar, salt and fat. If some do not want a perfect diet, it is for them to decide, not some self-righteous board of collectivists. But why we will never win is obvious. Our arguments never include shutting down opposition, whereas that is the central tenet of collectivism.

Brian:

13 Mar 2014 10:13:50am

"That is, taxes are compulsorily taken from me, without any choice as to how the money is spent. Foxtel in prisons? I say, let lefties donate for such initiatives. I would rather my money go other needy people, like law abiding Single Parents."

"On the social side, again, freedom is the key. If I want to smoke, I should be able to without the imposition of lifestyle taxes like tobacco excise."

Extending the line of thinking from the first point, should I not then be able to choose whether I pay for the health costs of your consciously chosen, known to be risky smoking?

If only there was some way for the costs of activities such as these to be placed on to the individuals who choose to engage in them rather than the collective...

the yank:

They tried and failed in the USA.However not by not calling themselves Libertarians and by not telling us what their "plan" was we in Australia six months ago elected the downunder version.

One more note. A major reason for the short fall in taxes is that international corporations are using loopholes in our tax system to spirit out billions of dollars and end up paying less then .04% tax on their profits.

And the new Australian Libertarian or as you know them LNP instead of putting into place the Labor parties bill to identify and make public the profits of these companies is ditching that because people might learn too much.

Imagine that. Abbott is afraid we might know too much about the profits of multinational companies.

Daveb:

Benice:

Yes, and she had to reach back 70 years to find an argument against "the extensive web of regulations ensnaring individuals and businesses", otherwise known as the law.

Perhaps some recognition of the far greater complexity of our economy and society than that of 70 years ago might have helped to make this article relevant. Or wasn't it intended to be relevant?

And, by the way, can someone tell me where the following statistic comes from: "government fiscal activities, predominated by welfare transfers, would account for the 35 to 50 per cent of national income that Western economies experience today."

For a start, this seems intended to mislead, by conflating welfare with figures for all government fiscal activities and welfare would actually be a percentage of that percentage. But I also think if you're going to make such claims, a source would be useful. And perhaps how it relates specifically to Australia, since that is the intended audience.

paulinadelaide:

12 Mar 2014 6:30:39pm

I believe the level of government activity in Australia is just shy of 40% GDP. 39% in 2012/2013 viz 35.8% in 2007/2008 & up from 27% in 1972/1973.By the way welfare recipients 1972 - 15.5% in 2012 25%.Also I may suggest most of the increase in "complexity" of our economy can be sheeted home to government interference.

Bev:

12 Mar 2014 7:52:36pm

Yes Sevareid?s Law, which states that ?the chief source of problems is solutions? Each additional solution compounds the problem and the resources the solution uses. Until the whole system chokes and collapses under it's own bureaucratic weight.

Benice:

12 Mar 2014 11:28:01pm

Yes, but in welfare recipients, you're including middle class welfare which is incorrectly targetted, and pensions which are the right of taxpayers in this country, after supporting other taxpayers throughout their lives.

In any case, if welfare is 25% of the 40% of GDP which is government activity, it is hardly predominating but is, in actually fact, only 10% of GDP. So, the author was conflating, as I thought.

And the idea that government activity is problematic in and of itself is a nonsense. Short and long-term economic stimulus by government and by public/private partnerships have been successful in this country and will continue to be so, despite the naysayers.

For the libertarians out there, though, you're about to find out what the perils are of free trade in a globalised economy without industry protection, if the current government has anything to say about it.

Then let's watch where the welfare budget goes. Unless of course, your ultimate fantasy is fulfilled and even the safety net becomes subject to the whims of the free market.

Benice:

12 Mar 2014 11:38:11pm

And just to clarify, the complexity I'm talking about can't be sheeted home to the government. I'm talking specifically about technologies, the diversification of Australian industry, the impacts of globalisation which bring the outside in in terms of differing levels of growth and costs of living across the world, the DEregulation of currencies, the (some would say deliberate) non-government imposed complications of operating within modern share and commodity trading and the financial services industry...

Need I go on? I wish for once that business, conservative politicians and their supporters would say what they really mean, which is that government regulation and assistance to those with no other means of support reduce the ability for them to drive wages and working conditions into the dirt for the majority of workers not lucky enough to be 'trickled down' upon.

Dress it up with as much left v. right ideology from a dusty 70-year old who would never have dreamed of a world as complex as the one governments HAVE TO regulate today, but the end goal is the same and you all know it is.

MJLC:

12 Mar 2014 4:16:15pm

I note that the message out of the IPA's megaphone yesterday was that work done in the 1930s (in this case legislation) was essentially old-hat and lacking in relevance for the 21st century. The theme that "a lot's changed" seemed to be one of the motifs.

Today we discover that a treatise about government interventions from the 1940s is so relevant it's almost painful.

It does appear somewhat obvious that utterings from the IPA faithful in the 2010s may perhaps not actually be relevant either in this decade or any subsequent one.

Peter the Lawyer:

MJLC:

12 Mar 2014 5:18:02pm

I take it the first four words were the title of your contribution rather than anything specifically directed towards me Peter.

In actual fact you're confusing the message in your consideration of the term "inconsistency". On one level there is absolutely no reason why there MUST be consistency between two writers from the same barnyard. It's fair to assume, however, that being ideologically joined at the hip there SHOULD be some consistency, but not necessarily. What you are missing is the consistency that does exist - calling up any old dribble to suit your argument and waving preconditions and benchmarks in and out of contention depending on their usefulness.

In yesterday's piece Mr Berg made great play of the age of the legislation. That's fair enough. It is incumbent on those defending it to make a case why age is inconsequential for this example.

However, if a fellow IPA zealot wants to use something of a similar age it surely is incumbent upon THEM to lay out in some detail why something that old similarly has currency in the Year of our Lord 2014. This hasn't been done (go back and check). What WAS done was an opening with the line; "Friedrich Hayek's warnings about the dangers of collectivism remain as relevant in 2014 as they did in 1944" followed by Ms Novak's selective interpretation of what was written backed up by a single quote from the book and a quote from the 1956 Preface.

Call me old-fashioned, but that doesn't justify "Friedrich Hayek's warnings (*note; plural) about the dangers of collectivism remain as relevant in 2014 as they did in 1944" as an opening sentence.

perplexed:

12 Mar 2014 5:52:30pm

Exactly Pete.

No inconsistency at all. The two essays are on completely different topics.

One's on government regulation of old not reflecting modern times. The other is that government regulation in modern times is not reflective of a 1940's free market theory that was not a fan of government regulation back then.

Johnny2:

12 Mar 2014 4:18:24pm

Who exactly are these people calling for their welfare entitlement?Is it the pollies travelling to weddings at the tax payers expense? Are they part of this offensive group?Or is it MP's flying Cairns to and going to football matches that are claiming their "welfare"entitlement?What about the miners who pay very little tax but still get diesel subsidies?Dont forget all the people who are negative gearing property. Are they also whinging cos they aren't getting their entitlement?People doing it tough on +$150,000 a year and still getting family allowances breaks?

If you are going to take a shot at welfare dont forget to cover ALL types that people see as their RIGHT in Australia.

Frank O'Connor:

12 Mar 2014 4:18:56pm

Leaving Hayek aside (Hayek, Keynes ... who bloody cares? Nowadays it's all disintegrated into the ideological rather than economic exigencies) the current societal inequality debate seems to ignore the political aspect.

The thing is that as the middle class shrinks and income accrues to the rich, then the proportion of the poor increases. Broadly speaking, the poor owe no allegiance at all to conservative parties ... which after all, and by their nature, represent the status quo.

Now, given that income inequality means that the status quo is inherently less attractive to the ever increasing number of the poor their voting intentions are likely to edge toward leftish or alternative parties.

Now neo-conservative parties may hang in there by hook of by crook (given some of the way out religious policies. outright divide-and-rule voter marginalism, bigotry and 'blame' policies some of them espouse) but broad based moderate conservatism will die out ... leaving the parties that represent the majority 'les miserables' in the majority. (In the US the Republican party has effectively done this by alienating the Latino and African American vote ... and only hangs onto what it's got by some judicious gerrymandering in the Southern states. Rigging voter registration and vote counting again is also an alternative if they want to remain relevant.)

At any rate, the smart move would be for Australian conservatives to make it tougher to vote, introduce complicated voting processes in the Senate, implement a complicated voter identity and registration scheme, get rid of compulsory voting and reduce the size of the 'les miserables' electorate by any number of other gerrymandering schemes ....

.... Wait a minute ... isn't that what .... ????

Of course, some moves to alleviate the income inequality (Australia's GINI rating has been dropping steadily for 10-15 years ... so Labor as well as the LNP has had a hand in presiding over it) could also stave off this electoral debacle - but that would be too easy wouldn't it?

Peter the Lawyer:

12 Mar 2014 4:56:06pm

Of course it is left wing regulation and policy that is causing the middle class to shrink. If you want better income equality (which in itself is really not that important) then you should support the cutting of welfare because it will encourage more people to get out there and make something of themselves thereby increasing the economic pie.

casewithscience:

JohnnoH:

12 Mar 2014 6:43:01pm

When you devalue people, or another way of putting it, turn them into commodies or resources, you devalue society. It like a footballer, because he owned by the team or corporation thwat owns the team, must play when he is injured or he may be SOLD to another team at the end ot the season. Wait a minute I used the word "sold" that means slavery.

casewithscience:

That is just flat out wrong. The reason for increasing accrual of wealth to the top percentiles is due to:

1. Improvements in technology that allow a smaller workforce to carry out greater activity with less personnel;

2. The consistent winding back of workplace arrangements and wage increases. If you hadn't noticed, wages have actually been on stand still in the >150k range since 2006;

3. The denouement of effective tax controls and the outrageous expansion of tax loopholes which are primarily available to the wealthy.

Now, my wife and I have a combined income above 350k and get the advantage of these things, I feel sorry for the poor schmo that actually has to pay a full tax rate without negative geared assets to off-set their income.

OUB :

13 Mar 2014 2:56:49pm

If you feel strongly about the ethics of the tax advantages available to you Case don't use them. I have not tapped transition to retirement with my super to be consistent with my comments here. I don't judge you....

Tiresias:

12 Mar 2014 5:34:49pm

And so no more subsidies for coalmines etc, tax concessions, special concessions...

Some of the most stable and successful economies in the world have high taxes and big welfare.

The idea of a society which is run by global free market forces is very, very scary, especially when at the same time there is talk on the one hand of deregulation and on the other talk of making a "level playing field."

Andrew Thomas:

Or are you talking about middle class welfare (pork barrelling) in the form of baby bonuses, stimulus packages, child care tax breaks and the fantasy that is the Paid Parental Leave Scheme?

Or are you talking about outright hypocrytical welfare given to the private sector corporations you are so fond of because their CEOs and senior executives who seem utterly unable to make or do anything new and innovative (so much for the private sector)?

Also, what about welfare to farmers?

Come on Pete, which of the above do you think need some encouragement? Seems like almost all of us.

HPH:

12 Mar 2014 5:55:39pm

"If you want better income equality (which in itself is really not that important) then you should support the cutting of welfare because it will encourage more people to get out there and make something of themselves thereby increasing the economic pie."

What a silly comment!

There are so many ideas wrong in this sentence that it makes no sense at all in our current economic climate.

1) income equality is not important - Why?2) cut welfare - Whose welfare are you proposing to be cut?3) encourage more people to get out there - Who are those people who need encouragement?4) make something of themselves - Make what?5) increasing economic pie - For whom? ..For Corporations?

Reagan Country:

12 Mar 2014 8:51:15pm

Hi HPH, I applaud your desire to have equality, but my question is do you want equal opportunity or equal outcome? To be honest, I'm not overly concerned how rich the super rich are unless their actions puts others into poverty. I'd rather see no poverty and inequality than poverty with equality. Yes, who could argue against equality and no poverty, but I can't think of one society that has succeeded in helping the poor by penalizing initiative. Communist states (USSR, Cuba, North Korea) were and are every bit as unequal as the USA, it's just the elite in those countries were / are political. PS: if I was super rich I reckon I'd volunteer for a charity and donate heaps to selected charities, and that option is available to anyone in that category. The fact many choose not to do so is a mystery to me.

HPH:

13 Mar 2014 1:21:59pm

"I'm not overly concerned how rich the super rich are unless their actions puts others into poverty. I'd rather see no poverty and inequality than poverty with equality."

I agree. I said it many times on these pages; I don't care how rich you are, how many millions or billions $$ you have, as long as every single human being on this planet has a decent roof over his head and at least one decent meal every day.

But,

If you are a full-time worker at Walmart and still living below poverty line and your family is on Food Stamps (Supplemental Nutrition Assistance Program SNAP) then there is something wrong in The U.S. free-market capitalist economic system.

Whitey:

13 Mar 2014 5:33:21am

Income inequality isn't NECESSARILY important. It often is most obvious when incomes are rapidly rising in some sectors, and not in others. The problem is always the degree of real poverty, and not simply by talking about the bottom twenty percent. When real poverty is growing, inequality becomes more problematic. When society is generally doing well across the board, it isn't an issue. Concepts like inequality are simply irrational. If you are starving, the idea that it's OK if everyone else is starving is bizarre. If you are doing well, but some others are doing better, it's an incentive to strive. Median incomes are an important factor in deciding if a society is doing OK, as is unemployment. Wage inequality is far less of a deciding factor in determining the health of an economy.

Alpo:

13 Mar 2014 7:15:19am

Good argument, Whitey, and I agree to a great extent. However, the more skewed the income distribution becomes, even if the bottom half is not starving, there is an issue of where to get the money for the public services and the infrastructure that are at the core of the general wellbeing: roads, public hospitals, public schools, fire fighters, etc. etc.The greater the skew, the more the highest percentiles of the income distribution should be taxed. The lower the skew, the more flat or relatively flat taxation can be. When you have high skew and low taxation (including the issue of tax evasion), poverty, injustice and eventually social turmoil follow.

Whitey:

13 Mar 2014 8:58:37am

Quite true Alpo, not saying that income inequality has no account, just that to focus on income inequality ignores other more important factors. We use median income instead of average income, because median incomes tell more of the story. If median incomes are quite high, than the tax take is substantial. While I agree with everything you say, the high median incomes in Australia mean that we are a long way from governments running out of income. Our problem with government policy, seems to be more about where our tax dollars are spent, rather than a problem of gross government income. One problem is that some benefits that were achievable in good times, should now be cut, but beneficiaries get a little addicted to welfare, be it middle, low or upper income welfare in it's many guises.

David Sauderson:

HPH:

13 Mar 2014 3:50:14pm

"The ALP set those offshore centres up."

The ALP lost the plot a long time ago.Privatisation of public assets and services: Iraq war: US diplomatic cables from the US embassy in Canberra published by WikiLeaks show that, for both political parties, Liberal & Labor, their alliance with the United States was their guiding principle.

So, what is your point?

"The Liberal Party is trying to close it down and rehabilitate detainees."

Bulldust! Their mates in Prison-Companies love getting millions of dollars government money. The government announced recently that they are going to spend close to a billion$ in refugee-detention industry.

Rehabilitate detainees !!! Are they criminals or mental patients?

Oh, let me correct the last term with this silly one: Mental health consumers.

Jane2:

13 Mar 2014 4:04:21pm

However the point at which an individual can make end meet is different for all indiduals.

There are people on 6 figure incomes who are living from pay cheque to pay cheque and there are people like my mother and her siblings who can save money and go on overseas holidays on the full old age pension with no extra income. At the same time there are people on 6 figure incomes who own multiple homes outright and are living pretty and peole on old age pensions who struggle to pay their ultility bills.

What level of income are you talking about? Whatever we set will not be enough for some and more than enough for others

Whitey:

Alpo:

13 Mar 2014 8:08:23am

"Extreme governments are rare.".... Until now, Whitey. The Abbott Government is under extreme pressure to introduce Neoliberal reforms that even Peter Costello would have never contemplated. This is the most unlikely Government that replaced a perfectly effective Labor Government made to look a "total disaster" by mere Media Propaganda. Now, the financiers of this "electoral miracle" are showing the bill and they don't want any nonsense, they want real Neoliberal action. Abbott initially resisted through his Populism, but now he has totally given up: Hockey and the Big end of Town are in charge!

Whitey:

13 Mar 2014 9:06:28am

Whether history decides this government is extreme is in the future. Frazer, with the razor gang was called extreme, turned out it was anything but. The fact that the present government refuses to rule out certain measures doesn't mean they will be enacted. History tells us most won't be. Most likely we will see this as a "right lite" government like the immediate predecessors of LNP governments, rather than an extreme one. There is huge political risk in any government moving far from the centre, Abbot is a social conservative, but seems to be largely an economic progressive. I may be proved wrong by history, but the fact that a lot of left wing commentators are "channeling" the future decisions of this government, doesn't mean it will happen.

Alpo:

13 Mar 2014 9:56:53am

Whitey, since this Government started there has been a few months of confusion and, I guess, thug-of-war between traditional protectionist conservatism (genuine from the part of the Nationals, a bit populist and a bit genuine from the part of Abbott) and full blown free-market neoliberalism. Free-market neoliberalism is now fully in charge and there is no going back. Watch for a surrender of Abbott's last bastion: his pet-project, the PPL. The direction is towards a more extreme side of politics and economics than Howard, which is not a very reassuring development. Time will tell, of course, but things are taking a more definite shape now.

Whitey:

13 Mar 2014 2:55:04pm

Yep, agree the PPL could be at least watered down, and probably should be. I think there will be cuts, but will be astounded if they are earth shattering. There is plenty of waste could be trimmed, expect some changes to middle class welfare, but at this stage right wing neoliberal policies aren't being enacted. Feel free to remind me when wholesale changes to welfare are made, but I'm not holding my breath.

taxedorff:

12 Mar 2014 6:27:47pm

so the cutting of welfare would nullify the rich baby bonus ,, simply put if the well off want a latte baby they can leave work and spend their time making babies....yes good idea then we also cut the welfare to rich self funded retirees no more help there , etc etc the list of welfare isn't concerned with the poor or those in need.

New World:

12 Mar 2014 7:02:29pm

Peter

Since you have a bit of time on your hands, you should go to the Charities that financially assist people. These Charities will be able to inform you of the struggles many have on Government payments. These Charities can tell you of working families who cannot make ends meet.

Life is not great on Government payments especially unemployment benefits. Unemployment benefits are low to encourage people to go job seeking, the problem being people on unemployment benefits have to rely on charity or they would either be thrown out of accommodation or starve.

A lot of people are not doing that good. You should check it out. The system is working as you are saying it should work, but it is heart breaking for many, who cannot make ends meet.

Mitor the Bold:

"Of course it is left wing regulation and policy that is causing the middle class to shrink."

Another fact-free rant. The post-War decades of lefty welfarism have seen the greatest explosion of the middle classes than at any other time in history.

The slow erosion of these gains since then by successive conservative governments in Aus, Europe and the USA has seen a steady growth of the poor, the rich and not much in-between.

I don't know why we bother to speculate what life would be like with unfettered capitalism and a dismantling of collective benefits like health and education - it was our world prior to the Wars. Look at the black & white photos of inner-city squalor and sober-up.

JoeBloggs:

all those 'slackers' on welfare just need to walk outside their house and jobs will fall from the sky hitting them in the head (hense their reluctance to go outside and seek work).

perhaps one can dig a hole in the ground, and another one can fill it in afterwards, they can then pay each other for their work, the economic pie then magically increases and the government gets a tax cut from both of them..... though where the money to pay each other and the tax man will magically appear from is still a mystery.

paulinadelaide:

12 Mar 2014 6:46:13pm

I understand Australia has the highest equality of income in the world. What you need to understand is if you get poorer, the rich get richer, if you get richer the rich get richier and if you stay the same the rich get richer. It's called a growing economy. If the economy tanks the rich may get poorer but you sunshine could be stuffed.

will_r:

12 Mar 2014 8:06:50pm

*Or*

The rich can acknowledge that their wealth is built on the backs of others, and give up a portion of their gains so that those not born to privilege can benefit from this social construct we call the 'economy'.

roddo:

12 Mar 2014 10:59:18pm

The obscenely rich wouldn't have gotten so rich if they were generous egalitarians.

You can't expect sociopaths to sacrifice what they have for the good of society.

This is why taxes are compulsory and we penalise tax avoiders severely.We just need governments to get together and work out how to stop 'International Capital' from transferring profits to overseas tax havens.

Decade of the Bogan:

As far as I can tell, most of the welfare went to those who would support your article in a disgusting display of wishful thinking that they were somehow the leaders of our community.

While it is acknowledged that there is a lot of middle class welfare shameless lavished from both sides of government in the past two to three decades, and equally shamelessly taken up by the electorate in a vial betrayal of their own children's future, what is far more hypocritical and disgusting is the "profitisation" of welfare by corporates in the form of bailouts and stimulus. That is to say, the current generation of CEO's and executives of some of the world's largest corporations have been treating the tax dollar as a way to supplement both their incompetence whilst boosting their profit margins. Until such companies are allowed to fail, and until such time as would be business people who appear utterly unable to make a business work are made to feel the consequences of their incompetence, then the entire financial sector and the business world should bow their heads down in shame.

So why don't people like yourself focus on this gigantic elephant in the room instead of pointing the fingure at government which has been stupid enough to prop up a generation of failed financial and business managers.

J.T:

APM:

12 Mar 2014 6:28:14pm

The collectivist 'glee' has already reared its head here over an investigation that found only four out of 97 ABC asylum seeker stories were biased - although I believe this does hint at something amiss. There was not found to be any systemic bias, but the ABC always makes sure such claims cannot be proven by breaking up such claims into individual components that hides patterns of bias.

Firstly, the ABC frames all asylum seeker output in terms of narrow Leftist interpretation of human rights and the Refugee Convention and 'compassion'. Most Australians would disagree with this. That is bias. Secondly, there is what isn't reported. The ABC feels that information that portrays asylum seekers in a bad light is to be not reported - censorship. The ABC does not make any effort to tell us about the lies, the bogus assessment process, downplays violence and other vile criminality that I can't even mention here, or the sense of entitlement such as the Iranian who expected a free breast enhancement in detention. This lack of scepticism is bias.

The Australian peoples' market (otherwise known as democracy) says we don't want asylum seekers, but the ABC clearly welcomes them in their droves.

tempo:

12 Mar 2014 4:27:03pm

Novak writes, "Today, more people apparently view helping themselves to others' money as their "welfare entitlement"".

I assume Novak is talking about the car industry, the aviation industry, the IT industry, the mining industry, the pharmaceutical industry etc... She is talking about big business with their snouts in the public trough right?

Grish:

13 Mar 2014 10:10:08am

I don't think you understand the difference between 'being given money' i.e. snouts in the public trough and 'not having money taken away'. Good grief. The government doesn't have a pre-established right to your money such that not taking it away becomes 'spending'.

tempo:

13 Mar 2014 12:18:57pm

I don't think you understand Grish. "Being given money" and "not having money taken away" amount to exactly the same thing. It's not rocket science.

If everyone is paying their fair share of taxes except your neighbour then you are subsidising your neighbour. If everyone in society is paying their taxes to support infrastructure except for corporations who move their money offshore then you are subsidising those businesses.

Chris L:

Seano:

12 Mar 2014 4:28:02pm

"A central theme of Hayek's The Road to Serfdom is that extensive economic interventions by government suppresses the ability of individuals to make their own choices, and this leads to several dire consequences."

Extensive economic deficiencies also supress the ability of individuals to make there own choices. There are two different issues from what I gather, not having read the book yet. I've long been convinced that the 'bottom-up' style of government empowers all individuals more than the 'top-down' approach, but when it comes to economics, could it be that the financial transfers of the monetary system in general have proven over the ages to be inherently flawed when it comes to the sustenance of the entire global population?

The best way to reduce government welfare expenditure without burning anyone's fingers might just be to take a good hard look at the integral monetary system, which was intended as a tool for social interaction, not the entire reason for our existence.

APM:

12 Mar 2014 5:03:13pm

'anything dat gives me more money iz good.'

Government giving you more and more money is less legitimate and has less negative social consequences than getting off your backside and creating wealth. You know, the people who actually pay for the entitlements you think you deserve from a magical government god. Plenty of do-gooding government policies and laws also lead to 'death' like asylum drownings, pink bats, and breaking down the family unit to be replaced by busybodies who know what's good for you. The ABC is only looking out for causes and groups it approves of and dismisses many or most Australians as rednecks to be vilified and indoctrinated. Big government is slavery.

MDG:

12 Mar 2014 8:28:25pm

Uh, you realise that the problem with the "pink batts" program was INSUFFICIENT regulation and oversight, right? The main problems were in Queensland where the insulation sector was unregulated. In South Australia, where the sector already had a regulatory framework, the Home Insulation Program went off without a hitch. And don't you also see that the only way to prevent the "breaking down" of the family unit is to legislate against the free choice of adults to separate? How does that fit in with your philosophy of small government?

Ronaldo:

13 Mar 2014 8:38:17am

For a start I refuse to believe that your concern about asylum seekers is really based on your concern for their life. It is a complete fig leaf.

Secondly, I was a recipient of welfare in the form of AUSSTUDY while at uni, it is only a small allowance and so I was still required to work. Now I am in the workforce in a well paying white collar job paying plenty of taxes and generating plenty of wealth. The government is receiving a good return for their outlay. That is not to say the system is perfect (it's definitely not). But to have a functioning, harmonious country we need to support people at the times they need it.

It a bit of a stretch to blame the government for the breakdown of the family unit isn't it? The divorce rate is basically 50%. That's your family breakdown right there. Nothing to do with homosexuals, polygamists or any other bogeyman you might like to throw up

Unfortunately it does seems to me that "many or most Australians [are] rednecks to be vilified and indoctrinated". It's just that News Limited is a more effective indoctrination service.

Anyone on a five figure income who votes conservative is being taken for a ride.Democracy is a popularity contest between the rich and the rest with the deciding vote cast by the ignorant.

Fred:

12 Mar 2014 4:32:12pm

Free market extremists are the greatest threat Australia faces.

Free market extremists like Julie Novak and her puppeteers at the IPA want to tear up everything - our SOVEREIGNTY (nations and borders get in the way of the free market - let's sign away our soveriegnty in the TPP) our families (spending time with the family on weekends adds nothing to economic growth - penalty rates must go!) our environment (if the market wants the Great Barrier Reef to be a rubbish tip or Tasmania to be a giant pulp mill who are we to get in the way?)

Free market extremists put their religion (the market) before their nation, their community, their family.

JohnnoH:

taxedorf:

12 Mar 2014 9:34:47pm

Detroit is a ghost town because of the collectivism of making people unemployed ..... thank god for the collective powers of the free market economy to hate collectivism whilst doing it figuratively to the workers

anote:

12 Mar 2014 9:04:37pm

OK but it is an extreme view which poses the only alternative is an opposite extreme.

This coming from an individual paid by an organisation that is in turn funded by large companies and corporations to present such views. Views which integrate the view that a corporation is equivalent to an individual and there is no difference between an individual trading with another individual on a minor exchange and an individual trading with a corporation on an exchange that is major for the individual.

volkovic:

12 Mar 2014 11:20:47pm

Free market extremists are the greatest threat because they put freedom of the markets FIRST on their list, and FREEDOM and SOLIDARITY amongst the CITIZENS comes only as an afterthought, a poor second or third. Freedom of markets is mainly important to the rich, firstly because they can live on their capital, rents and revenues, and secondly because such freedom will give them advantage over the exploitation of natural and human resources.

Mark D:

12 Mar 2014 4:32:15pm

Its amazing how many healthy, fit people of working age I meet that have made an entire life bludging on welfare. Many of them are on the disability pension but seem perfectly fine. I should know, I own a niteclub and I see these people there almost every night parting away till closing time. They drink, smoke and dance the night away. They will tell you they cant work because their depressed, or have sore back or some other fanatasy. Yet these same people spend their night partying away on the dance floor. They seem to hang around other people on welfare as the customers with jobs want nothing to do with them. And dont dare suggest to any of them to get a job because they become hostile very fast. They think it is their right that hard working Australians should work hard and pay taxes to support their bludging lifestyle.

Evisrevbus:

12 Mar 2014 4:59:48pm

Well, your night club entry fees must be pretty cheap and you must be giving drinks away, because on a little over $500 a fortnight, unemployed people wouldn't be able to go every night otherwise. You seem to know the value of your own services......

Clancy:

12 Mar 2014 4:59:54pm

Mark D, there undoubtedly are a proportion of people on unemployment and disability pensions who are expecting the rest of the community to carry them, but among the people I know on these benefits it is a very smal proportion. Most want to wokr and are actively looking for work. The unemployment rates and underemployment rates suggest that there just aren't enough jobs to go around, particularly for younger people, those over 50 and those who are less skilled.

With regard to the article by Ms Novak, I too am wondering if she is considering corporate welfare, middle class welfare, etc when she is thinking of the welfare state, or is just pointing the finger at the most disadvantaged people? Me, I'm more than happy to pay my taxes and would happily pay a few percent more if it would go to causes I value - like increasing unemployment and old-age pensions, education, and the like, rather than to middle and upper class welfare. I am ashamed that so many of my fellow well-off Australians don't sem to be aware of their own priviledges and have so little empathy for those who haven't access t those same priviledges.

Mitor the Bold:

13 Mar 2014 9:22:32am

Yes, Olive speaks for me. All us "centrists/leftists/socialists/moralists or whatever we're calling them today" have the same opinion of 'niteclubs' and their proprietors.

I think olive was railing against someone's portrayal of strangers as bludgers based upon little more than supposition. Even if it were true this says nothing about the provision of welfare in general. Some people steal from banks - that doesn't make all of us armed robbers. It was a stupid point badly made. People who hate people probably shouldn't run people businesses.

Kate Emerson:

12 Mar 2014 5:54:24pm

Where is Heavily Armed Spelling Police when you need her? Anyway, you are making little sense and frankly, unless you provide statistical info about what % of your customers are on the Disability support pension, I doubt that I can believe you. Your comment about people 'seeming perfectly fine' is an odd one. My Father committed suicide and to the moment he did it, he seemed perfectly fine. Here's a hint: if you know nothing, say nothing.

James Matt:

12 Mar 2014 7:54:08pm

Im a regular on weekends at the clubs and Im also amazed at the large percentage of people at these clubs on welfare. In fact there is always more people on welfare then those that have jobs. They also always seem to have more money for drinks then people with jobs. I also notice some of these people on welfare have very expensice cars. I cant say wehere they are getting so much money from, but I am aware of some of them running cash in the hand businesses on the side. Its hard to believe a person can go 10 to 30 years and can never find a job.

perplexed:

13 Mar 2014 1:57:36am

I must admit that my middle age has seen me frequent night/nite clubs less than what I did a few years earlier, so I am not entirely passe with the current trends. So I will defer to the superior knowledge that others clearly possess.

Up until a few years ago, the unwashed welfare bludgers' didn't wear tattoos on their foreheads, or have signs around their necks, or any other outward signs of complete disdain for society.

Has that changed lately so that they are now readily identifiable at nite clubs?

If so, what are management doing to ensure that their gate keepers are making sure that such undesirables are not frivolously wasting our hard earned up against the porcelain?

Of course, there is welfare, and welfare. James is right. The number of beamers is growing exponentially (data not readily available), whilst wage growth has been somewhat subdued - 2.5% or something.

Mitor the Bold:

Mark James:

12 Mar 2014 4:33:54pm

". . . collectivism bringing about a loss of liberties"?

You mean, like employers associations, business & industry groups, think tanks, political parties, marriage, the IMF, the World Bank, The Institute of Chartered Accountants, NATO, NASA, the European Union, the United States of America . . . are all bringing (or brought about) a loss of liberties?

What utter rot, Julie! And you surely know it is?

If only we'd been endowed with this level of corporate libertarian 'wisdom' while cave-dwellers, we might still be huddled together in our little genetic tribes, refusing to de-atomize for fear that co-operation with others, and the sharing of property and knowledge would cause us to become shackled to our collectivist yearnings.

Grish:

12 Mar 2014 4:59:17pm

There is a substantial difference between collective action (people and groups coming together to advance a common interest) and collectivISM, which elevates the collective good above that of the individual in a way that is not consensual. So while there's nothing wrong with unions (collective action) there's a lot wrong with unionists who use violence against people they'd consider 'scabs' (collectivism).

Ralph:

12 Mar 2014 5:41:01pm

That would be the unions against the scabs who assisted Howard and Reith to destroy the dockworkers union. After the dispute ended the scabs were sacked and some asked the union for assistance even though they helped destroy it.

macca:

12 Mar 2014 7:56:20pm

Ralph, the waterside workers union didn't need anyones help to be destroyed. They did a superb job of that themselves. They were collectively one of the largest criminal organisations in Australia at the time and we are certainly better off without them. Their perfidy is well known and I don't intend to reiterate them here, all I can say is good on you Peter Reith.

JohnnoH:

Mark James:

12 Mar 2014 9:36:24pm

Grish, from the New Shorter Oxford:'Collectivism; n. Collective ownership of land and the means of production, as a political principle; the practice or principle of giving the group priority over the individual.'

Collectivism is what allows, for example, political parties to operate as a unified whole. The individual constituents surrender sovereignty for the good of the group. It's not only how political parties operate, but nation states, armies, employers groups, co-operatives, corporations, etc, etc.

Of course, "there's a lot wrong with unionists who use violence against people they consider 'scabs'", but that doesn't define collectivism, and it doesn't define unions.

Joe Blow:

12 Mar 2014 4:35:21pm

Hayek was writing about centrally planned socialist economies. I think that history probably has supported him, though historical events are of course heavily influenced by the specifics of individual countries. But that is beside the point. The question is whether you can regard AUstralia's economy as being a socialist centrally planned economy, simply because it has lots of regulation? I don't think so. God knows, I am no fan of bureaucracy, and over-regulation is a disease, but the IPA's deregulation cure is worse. Let's keep in mind that the ultimate free market is the anarchist paradise. Perhaps the fastest anne most efficient way to get your goods to market is to drive them over your neighbours property, executing him in the process? Perhaps there should be no controls on the sale of dangerous weapons and drugs to children because clearly there is a demand there that the market must satisfy? Clearly, regulation is needed in a civil society. And let's remember the market is supposed to serve the people, not the other way around. So the only question is "how much regulation"? and this has to be argued on a case by case basis. But let's give up this silly idea of a completely de-regulated free market.

Ted:

12 Mar 2014 5:21:43pm

Well said. I think the wholesale scrapping of regulation without regard to any underlying purpose will be the next battleground in the Government's attacks on the people who put there, as long as we notice it happening.

perplexed:

13 Mar 2014 2:14:01am

In a completely 'deregulated' market I would be free to enter into a contract, to say get a loan to buy a house, then say to the bank once settlement has occurred, I don't ascribe to their notion of encumbrance and tell them to bugger off.

In the absence of regulation, they don't have a leg to stand on to enforce a mortgagee sale for default.

But that's not fair.

Of course, they might have some big lads who pay me a visit in the middle of the night to persuade me otherwise. Bit I might have bigger mates too.

That's not fair either.

So we have some operational parameters (let's call them laws) which create paradigm in which people can interact within without needing big mates in the middle of the night (let's call that an economic framework).

So the end result is we have these laws to stop people shafting us. The laws come about because enough people have decided that they don't want to be shafted that way.

When people behave nicely (according to the majority) and don't shaft, then those laws are not needed. When people do shaft, they are needed.

If laws are in place, then it is up to those pressing for their repeal to prove that a right shafting is not in the offing the moment they are. A very high burden of proof in light of their initial need.

J Dog:

12 Mar 2014 10:52:23pm

All true Joe. The gaping hole in the theory of a totally free market is humans. There are far too many who are driven by greed and a lust for power. The are many who would readily use their dominance to crush competitors. I find it ironic that many of the arguments used by free marketeers against planned economies or communism, are very much the same arguments that undermine their ideologies as well. At the moment we see a government that seems intent on ruling for the 1%, just as the communists do. They hide their secrets behind "on water matters", they want to bring back the ABCC which can compel witnesses to talk and have them jailed if they talk to anyone. They are embarking on a class war against the "welfare bludgers" just as the communists fought against the ruling classes. Trying to get rid of penalty rates instead of trying to get the rich to pay more tax. The right wing ideologues are just as nuts as the commies, they're just blind to it.

Jimmy Necktie:

Kocsonya:

13 Mar 2014 3:05:30pm

> The gaping hole in the theory of a totally free market is humans.

Quite interestingly, that's exactly what also renders the theory of communism unworkable. It assumes that people are altruistic, conscious, rational, bright and foreseeing.In reality, by and large, humans are greedy, insensitive, irrational, dumb and short-sighted creatures.

Adam Smith and Karl Marx were both rather bright. They probably thought that their fellow humans were just like them. They were wrong.

APM:

12 Mar 2014 4:35:40pm

'the final hellish destination on the road to serfdom.'

And that is a docile, feeble, compliant population that surrenders notions of personal responsibility to sneering paternalists, 'experts' and other Left fantasist ideologues who offer seemingly easy ways to avoid the facts of life, unwind the enlightenment, and lose their prosperity, freedom, and life force by stealth at first and eventually by barbarity. Basically 1984.

JohnnoH:

12 Mar 2014 6:56:38pm

I was of the impression that 1984 was about a worldwide right righted dictatorship where big brother controlled everything, sort of like the way Western Society is heading today. We have the effects of it already in Queensland.

MDG:

12 Mar 2014 8:33:46pm

1984 was fairly clearly an attack on Stalinist socialism of the sort that used to be promoted by the Comintern. The system in the book is actually called Ingsoc for "English Socialism." Where people like APM go wrong in citing 1984 is in thinking that it's a condemnation of ALL left-wing politics, when it isn't. Orwell was a committed social democrat and put his life on the line in the Spanish Civil War to fight for a socialist militia. He hated Stalin and the Soviet Union and what their system did to people and that's what he wrote against.

mr shark- not a lawyer :

13 Mar 2014 1:52:51pm

And that is a docile, feeble, compliant population that surrenders notions of personal responsibility to sneering populist radio shock jocks, , 'experts' from libertarian think tanks and other Right fantasist ideologues who offer seemingly easy solutions to avoid the facts of life, unwind the enlightenment, and lose their prosperity, freedom, and life force by stealth at first and eventually by barbarity. Basically if the public buy libertarian Ayn Rand inspired clap trap where the free market is the solution to everything then we end up with rabid do eat dog ethics ruling society , the enlightenment is stuffed either way Me , i prefer a middle of the road social democracy with a sensible degree of welfare that is targeted to those who need it , not a society where yuppies and lawyers demean anyone who is on a low wage or unemployed as leeches, spongers and bludgers. Those terms could equally apply to most the right wing over paid elites in the financial sector who need regulating before they destroy the entire eco system with their insane expansion expansion expansion credo, one cannot expand infinitely in a finite system, free market capitialism doesn't understand that one little bit.

whogoesthere:

12 Mar 2014 4:39:14pm

What a load of waffle. Tell us what you actually mean, scrap pensions, scrap the dole, scrap Medicare, scrap the minimum wage. What are you advocating ?.

I agree to a point, I have no problem with work for the dole, for example. Most people on a disability pension could also do some community or volunteer work I expect, there should be something 'given back' for the privelege of receiving welfare. And it is a privelege, not a 'right'. But, a mix of free markets, and welfare State seems to work the best in the real world.

People who are fixated on one narrow ideology, whichever one it is, and who believe that alone can solve everything, are never right.

Mark James:

Julie, what do you have to say to the following advertisement paid for and placed in the media by the Howard government in June 2007:

Headlined COLLECTIVE BARGAINING - MAKING IT EASIER TO DO BUSINESS, this is what it said:

"Collective bargaining enables businesses of all sizes to work together co-operatively. Small businesses can benefit by joining together to negotiate with a larger business. Larger businesses can find it more efficient to negotiate directly with a group of small businesses rather than each small business individually."

Are you saying the purpose of the Howard government in this case was to encourage businesses "of all sizes" to travel the road to serfdom?

NikMak:

MD:

12 Mar 2014 4:42:10pm

The free-marketeers' assertion is that the market governs itself, but we know from bitter experience that it's as corruptible as any totalitarian collective. Ideological purity doesn't exist, and characterising the ideology that you oppose as "hellish" is ludicrously overblown, but it does reveal that your enthusiasm for an anarchic, inefficient, adversarial society is, at least in part, takes a lot on faith. Hayek's tome is just another bible.

Original Aussie:

12 Mar 2014 4:43:39pm

If the Age of Entitlement is over, and cuts are looming; that should mean across the board, not just the poor, it should be middle/upper middle class welfare as well, Tax reform so the welfare dollar is better targeted.

Jimmy Necktie:

Society IS a collective:

12 Mar 2014 4:43:53pm

Another day another IPA paid mouthpiece gets a run. You're becoming predictably tiresome boys and girls. Perhaps we should have an audit of all IPA articles for a little balance. I dare say we would find a reversal in numbers compared to the ABC"s coverage of asylum seekers.....95% bias to 5% unbiased (and that's being generous).

APM:

12 Mar 2014 5:19:32pm

But we are a collective in other ways that do not involve excessive government interference and social engineering. For example, we used to be a collective (or community) based on generally shared values and cultural and historic roots until some hippies thought we would be better of importing people from backward, illiberal societies and religions that have zero interest in anything but their own communities. This creates tensions and dysfunction that requires even more government interference to stop the whole thing exploding. Now we are pandered to and divided according to identities, protect villains, and have lost the freedom to contest the bleeding obvious (eg Bolt).

MD:

APM:

12 Mar 2014 6:53:52pm

Thank you pedant. I am apparently a victim of the collectivist public education system. I meant to say we are a collective in ways that do not or should not rely on government to define 'community' or its standards or try and change it to suit outside communities.

Mark James:

APM, you're saying we should not rely on government, but you want Australia to be protected from people from 'illiberal societies and religions'?

Who exactly is going to protect you from all these dreaded others, APM, if not government?

Do you imagine privately funded vigilantes in patrol boats will secure our borders? Do you imagine corporate executives will volunteer to negotiating with the Indonesians with regards clamping down on people-smugglers? And how would this benefit shareholders exactly?

prison:

12 Mar 2014 4:45:59pm

I find this story quite disturbing. I'm someone who has worked solidly for 15 years without being wale fare dependent and have never considered the tax i've paid as MY MONEY. I find some of the language used quite offensive on behalf of those unable to find employment. "Other peoples money" is a term which is used to start conditioning readers against those on walefare, to eventually generate a backlash against the unemployed similar to that in the US where they are treated like scum.

The story reads like propaganda. You are fear mongering about socialism out of self interest, because your funders are from big business and they supposidly benefit directly from you pushing this agenda when combined with lowering minimum wages. They want walefare cut so that:

1. more are forced to work for them at low wages.2. less walefare may mean less corporate tax

Those who fund the IPA want to control the population. Socialism is the competition for this. Personally I would much prefer a democratically elected government to make these decisions for everyone rather than massive greedy multinational monopolies as you seem to be pushing.

I don't want to see minimum wage earners living on the streets like in the US, yet this is the direction you want us to go in. It actually makes me feel a bit ill inside that GREED has so much power in our world....and that considering an increasing wealth divide, people like yourself are trying to push an agenda which will make this problem WORSE! by putting more money into the hands of those at the top of the pyramid.

Ralph:

RosieA:

12 Mar 2014 8:47:54pm

I agree with most of your comments prison, particularly that large corporations (and groups such as the IPA) can be just as, if not more, controlling than democratic governments. The whole article is an appalling piece of writing with no logic or consistency.......Dr Novak blames socialism for all sorts of problems while ignoring the fact that none of the problems are confined to socialism.......they are the results of human attributes and as such, can find expression in many types of social organizations and economies. Why is such nonsense given any airing on the ABC?

anote:

12 Mar 2014 9:17:07pm

It is indeed fear mongering, propaganda and does get support from the ignorant.

Also, as far as even non taxed earnings go it is only earned because of rules in place which even the application of such extremism requires to survive in an ordered society. They ignore the social contract and effectively argue 'no rules' for their own self interest.

Cafe:

13 Mar 2014 2:02:55am

Well said prison. This sums up in a nutshell where this line of thinking leads. If all our society is meant to be about is money and the economy then we are headed for societal disaster...back to where we were before the enlightenment.

Our emphasis on money rather than human well-being is a morally reprehensible approach to our future and libertarianism (in its current neo-con form) is at the forefront of this destructive mantra. Apologist for selfishness.

Jimmy Necktie:

Johnno:

12 Mar 2014 4:46:47pm

Commrades to the barricades......

Because that is where social inequality leads. Eventually if nothing is done and the gap between rich an poor grows too large the mass of the poorer citizens will rise up and physically take back that which has been taken....

Alpo:

12 Mar 2014 6:09:47pm

Johnno,They hope that by injecting massive doses of propagandistic morphine through the Media, they will be able to keep on increasing inequality without the risk of the barricades.... Poor little innocent souls....

Peter the Lawyer:

12 Mar 2014 4:47:26pm

Well said Julie.

Of course the problem with the left-wing view is that they cannot ever realise the importance of non-profit bodies. It is those bodies, including unions, that should provide welfare, not the government.

Back when I was young it was still shame ful to receive welfare. Now it has been made respectable. In the case of middle class welfare we see people being bribed by their own money.

However, it is very hard to change this, because most people are only able to see their own selfish needs.

Seano:

12 Mar 2014 5:29:45pm

It's definitely not respectable in anyways at all, even when you are able to keep reminding yourself that you've paid more than your fair share of taxation for a quarter century. You get used to the shame and social exclusion, because getting through the 14 days is a much more serious worry when there's nothing you can do but play weekly lotto and hope and pray for either one of two categories of solutions: money or death.

What would you do, Peter, if you'd been denied repeatedly the opportunity to further your education to get a modern-day desk job, and your body was too old and smashed up to lug heavy things around anymore? Crime is not a valid reply.

Daniel:

13 Mar 2014 9:39:39am

Back in the day where attitudes about welfare being shameful were more common:A University Education was free.We had a healthy Apprenticeship program.When a business couldn't find a skilled worker they trained someone instead of importing Labour.Unemployment was low and getting a job was easier.House prices were lowerWealth inequality was lowerMany households could survive on a single income

MD:

13 Mar 2014 11:23:57am

It's never been shameful, nor respectable, to accept help, and it's depressing that you feel the need to characterise it in either way, and to make the aspersion of people in need of it. You define yourself here by your employment, from which we assume that you consider it (and yourself) respectable and impressive, and that your pronouncements carry more weight by its virtue. Give the notion of prejudice some thought if you're ever a candidate for, the bench. Nobody does everything on their own, but you shouldn't be ashamed, by your own measure, that you've received somebody else's help. Unless you think that you are, and always have been, master of your own destiny? If so, maybe you could've aimed higher than "lawyer".

olive:

12 Mar 2014 4:48:07pm

The writer thinks that AU is on the road of serfdom. I assume she thinks this was before the Coallition got in - now they'll lead us to the "right" path.Hayek and his follower Friedman's ideologies have brought us something called GFC. World is still recovering.What is the point of governments? Lets have total anarchy where things "just sort themselves out"; no need for politicians and their entitlements, we can sort it all out ourselves - no need for representation. If economy should be let free, than why not the governing (except there wouldn't be any)?

Jane2:

13 Mar 2014 4:23:19pm

You forgot half the equation

"The so-called GFC was brought about by corrupt central bankers, mostly in the US and UK, aided and abetted by corrupt governments and corporations" and gready individuals not bothering to think for themselves as to whether they could really afford what they wanted.

RStoni:

12 Mar 2014 4:48:16pm

Hayek's book is NOT as pertinent now as it was in 1944. A few things have changed in the meantime, principally the contest between Soviet collectivism and capitalism. The voices in support of collectivism have all died. There is no argument any more.

The only time the subject comes up nowdays is when the ranting right want to scare the bejesus out of people so they can support a lurch further to the right. The argument is now - where should we position our economy in the capitalist spectrum - not how do we compete with the dead horse of collectivism, and the Randian nutters trot out poor old Fred Hayek as their flag bearer for their extremist views.

Ms Novak, I suggest you ask Alan Greenspan about how far to the libertarian right we should be game to go. He seems a little humble these days about his libertarian ideals and the financial disaster he oversaw.

Joe Blow:

12 Mar 2014 4:48:19pm

And another thing? The current fashion (God, did it ever go out of fashion?) is to bash the notion of welfare. Clearly the poor Gina Rhineharts of this world have to pay taxes (though as little as possible) to support the workers who have worn themselves out in the services of capital (pensions), can't afford to pay the rent in our investment houses (housing support), were born disabled or became so, sometimes at work, (disability payments) and who have been laid off by companies who need to strategically protect their bottom line (unemployment benefits). What would these persons and companies do if there WERE no workers to carry out their industry and make profits for them? Do we see Gina down there in the mine, working' up a sweat? I don't think so. So why do we carry out this "wealth transfer"? Is it to make sure we have some kind of civil and orderly country to live in?

And speaking of wealth transfer, I think we can all agree that the last half century has seen the biggest wealth transfer in history, and the direction of the transfer is upwards, not downwards. The gap between the rich and poor has grown to a yawning chasm, so I can't see that the welfare wealth transfer has been TOO bad for capitalism. Let's keep in mind what happens when the majority of people are left in abject poverty by the wealthy few - civic unrest, instability, revolution, violence, and worst of all - a loss of purchasing power. Very bad for the markets.

Evisrevbus:

12 Mar 2014 4:50:09pm

Firstly, it's deliberately misleading refer to total spending on welfare transfers, which include aged pensions (which is far larger) when mounting an argument specifically about unemployment about temporary assistance in catastrophic situations, unemployment and temporary sickness.

Secondly you attack the existence of the safety net on the basis of perceived problems with policing eligibility. The need for an adequate safety net and the need to rigorously police access against reasonable criteria are two separate things and a perceived failure of the later (even though there is little evidence to suggest it is widespread) does not provide a reason to remove or dilute the former.

Thirdly, markets are never completely free or perfect. Unfettered markets, devoid of any controls, will inevitably lead to the exploitation of those with least capital, starting from the day they are born, and will create for them the sefdom you and Hayek are keen to avoid......but as long as it's only the poor who are serfs, that's OK!

Jerry:

12 Mar 2014 4:50:34pm

Julie this is a lazy article. You have copied the rhetoric of the US conservatives and show no sign of ever having read Hayek Did you know for example that Hayek supported Government sponsored universal health care and insurance?

It is worrying that conservatives no longer believe that they need to present logical argument backed up by facts. Like the witch doctors of the past the mere muttering of incantations is deemed enough.

It is also notable that conservatives are prepared to repeat the arguments of the past without any analysis showing that there arguments are applicable in current changed circumstances.

Spot, thelongjohnwearer:

12 Mar 2014 10:24:21pm

It would not be the first time that the disciples ignored the teaching of the prophet (or is that the profit?). neo con fundamentalists tend to overlook what Adam Smith had to say about bank regulation, and Friedman about guaranteeing minimum incomes and liquidity during severe downturns.

TrevorN:

12 Mar 2014 4:51:36pm

I'll be damned if I don't want to have another go:

We poor old PAYE taxpayers provide the bulk of the governments revenue and are entitled to get something back for it, but all you neocon wannabes want to do is to kick the working class, the poor, the disabled, the sick and the disadvantged.

You want to prop up already obscene business profits and give our money to the richest amongst us.

You want to destroy our society, put us down and enslave us while at the same time expecting us to fight your illegal financially motivated wars while you sit safe at home counting your money.

It is time for everyone to tell your lot to take your sneering criticism and shove it...

This is by far the worst bit of right wing propoganda that the Drum has ever published.

Cafe:

Kate Emerson:

12 Mar 2014 4:52:21pm

Julie, where were you when miners such as Gina Rinehart put their hand out and received millions in corporate welfare? Her business, making billions, is regularly subsidised by the taxes of the people. As Paul Syvret, writing for the The Courier Mail said recently, she cops a lot of business welfare and that people like himself get a fair share: 'As a major mining industry player, she shares in the estimated $4 billion in subsidies and tax breaks extended to the sector each year, the biggest component of which is an estimated $2 billion-plus in the form of the fuel excide rebate.

In fact, people like me are among the biggest drains on federal coffers, even though my relatively well-off household has never claimed unemployment benefits or received family payments or pensions of any kind.'Like other reasonably well-paid Australians, I can minimise my tax by contributing extra to my superannuation at the concessional rate of 15 per cent. At the other end of the spectrum, workers earning less than $18,200 a year pay no income tax, but still have the 15 per cent applied to their retirement savings.'So, where are your articles about this? No where to be seen which actually makes you quite the hypocrite.

Charles:

12 Mar 2014 6:38:32pm

Such flagrant ignorance by Kate can't go unremarked.

You can't tax business inputs, because if you did there would be no business activity on earth. It is a legitimate business deduction, not a subsidy, and if you cannot detect the difference then all you are doing is just advertising your stupidity to the wider world.

Rational Thinker:

12 Mar 2014 7:19:41pm

"Get rid of the legitimate Business deduction". Just legislate it Out.Hide behind whatever accounting term you like. Call it what ever you like. But it should go. Long before supporting the poor and disadvantaged. I don't see supporting corporations as doing anything more than adding to the coffers of those who run them and/or have a vested interest in them.

People aren't stupid. That is exactly why Kate and many others on this post are the diametrically opposite to stupid. We would be "Stupid" if we simply just folded our arms and gave up and just aquiencsed to persons like yourself and your "flagrant" opinions Charles.

Frank O'Connor:

12 Mar 2014 7:29:14pm

And I can't let your assertion go unchallenged.

Business inputs are handled quite nicely in the tax system when treated as DEDUCTIONS ... but when REBATES are applied the government is taking up the investment slack and awarding any business that receives it a GRANT. In other words, the government becomes a party to the business's operations.

And REBATES are being abused big-time by big business. In effect the government s coming to the table to alleviate their costs - and that my friend is the taxpayer subsidizing business. Factor in 'research grants' and other government sponsored awards, and a large segment of Australian business is doing exactly what it castigates overseas competitors for - living at the public pot.

Kate Emerson:

12 Mar 2014 7:29:33pm

It's actually Paul Syvret's opinion-I'll tell him what you think, but actually Charles, you are the person with the ignorance here. No one is talking about taxing business inputs. We are talking about giving businesses great big tax breaks and great big rebates. You didn't address this at all. So...why comment when you don't know quite what you're on about? Charles, ideology is no substitute for facts.

Huonian:

12 Mar 2014 4:53:16pm

What a pity that so much economic debate is between those who idolise Keynes and those who idolise Hayek. Both wrote their stuff 70 years ago and the world today is nothing like the world they understood back then. Why do so many old books, possibly great works in their day, end up becoming "bibles" that their adherents follow slavishly despite the changing world around them?

What would amaze Hayek most of all, were he around today, would be the conga line of middle class folk and corporate capitalists queuing up to plunder the public purse. Neither Hayekian theory nor the original welfare state theory had that in mind!

By all means, let's get rid of the so-called "age of entitlement". But, in doing so, let's not welch on our responsibilities to those who are genuinely unable to be self-reliant.

The welfare state should and must be about those in genuine need. Families on $75k plus should be paying into the welfare state, not taking out. That way we can afford to pay a much better level of income support to the aged, single parents, the disabled and their carers and so on.

You know the system is broken when families on $75k plus whinge about how hard life is and who begrudge a single parent family getting less than half of that!

Daniel:

13 Mar 2014 9:49:52am

One reason people look to history for Economists is that the modern schools of economics were captured by the wealthy and now teach a theory full of bad assumptions. A theory that could not predict the GFC, a mathematical model of economies that does not include recession as a possible state. Where trickle down theory doesn't just make the inequality worse.

We have modern economists to read and learn from but they are marginalised and often having to find work in other fields because business, politicians, and the rich only want to hire economists when they are telling them what they want to here (ie. when they are wrong.)

LABCR-TV:

13 Mar 2014 12:47:26pm

'A theory that could not predict the GFC, '

Wrong.If you do a little homework, you will find that there were indeed several 'financial' people who predicted it. Gerald Celentes is one.What you will find is that the drone (read mainstream) media never told us about it, because they assume what the central bankers and governments tell them is true.

Rational Thinker:

12 Mar 2014 4:54:47pm

"Nobody but the most ardent socialist would have imagined, in 1944, that government fiscal activities, predominated by welfare transfers, would account for the 35 to 50 per cent of national income that Western economies experience today."

The above statement is a Fabrication.ABS statistics state:Percentage of GDP in Australia on welfare is 8.4% to 9.6%Percentage of Tax revenue is over the decade with the exception of 2007 is 29.3% to 34.5%.

75% of welfare payments go to payments for individuals and families.25% of welfare payments go to welfare services.

Of the $90billion in payments (the 75% of welfare)

$36.6 billion go to older Australians$$25 billion go to families

According to the OECD average payments to families are higher than the average. According to the OECD average payments to survivors, old age and unemployment are below the average.

BTW Hayek is outdated. We do not have a fear of socialism in the current era but a very reality based monopolisation by corporations. No longer is it the monopoly of Central planning by governments but rather the control over government and society by multinational corporations of all stripes to monopolise and control the agenda of society.

Hayek should be updated and applied not to outdated concepts of socialism but to the so termed "Free Market" and the Multinational Corporations. otherwise we are all excluding the elites on the road to serfdom,indeed.

John51:

12 Mar 2014 9:04:28pm

Rational Thinker, you are being too rational there. You are aware that IPA and facts do not mix. I would suggest that they are diametrically opposed.

I must admit I was for the briefest of moments trying to work our how you could have welfare at a higher proportion of GDP than the government tax take. But it was only very very brief before I said how silly of me.

I must admit I have a broader version of welfare to you. I include the superannuation tax subsidy of the budget a form of welfare. But of course it is mostly a form of welfare to the very well off as most of that tax concession goes the top income earners who would never have applied for a pension. And of course I add to that the concession of tax free super pensions which again is a form of welfare for the very well off.

I also include in my version of welfare negative gearing on property which again is mainly welfare for the very well off who have the capacity to make use of this tax system to reduce their taxes. And on top of that I add Family Trusts to my list of welfare and again mainly used by those most well off in our country as tax minimization mechanism.

And I have a much longer list of what I would term welfare for the middle and upper middle class along with the most wealthy in this country. Now I would agree with Julie if she was talking about this type of welfare for those who do not need it. But I very much doubt she is. I just have this feeling that she is in fact talking about welfare for those at the bottom of the income group.

Neil62:

John51:

12 Mar 2014 5:03:33pm

Hey Julie, at least one thing about your writings, you never surprise us with your ideological arguments, do you. I am just trying to determine which Socialist State you are comparing us too. Socialist Germany, your so called Socialist Britain of the post War World 2 up to the period of Thatcher, or the communist Soviet union.

I do agree with you in one point and that is Howard took welfare into new regions with welfare to the middle class and rich. Though somehow I do not think Abbott and Hockey are going to touch that. The thing I do disagree with you is that government should leave wealth distribution to the markets.

Leaving wealth distribution solely to the markets is the most absurd of ideologies that one can think of. The markets only do one thing and that is to put more and more of the wealth of the nation into fewer and fewer hands. Wealth by its very nature flows into the hands of those with the most wealth and power. That is an innate law of the markets.

Seeing that within a market system, wealth flows in the direction of wealth and power. Governments only have one option. And that is to intervene in markets by the redistribution of both wealth and power to those who have the least.

Whether government should do it through welfare and services directly or through investment in the economy to achieve a broadening of the economy is not the correct argument. It needs to do all of the above. And it needs to use a number of mechanisms including the use of a progressive tax system. In fact we need a more progressive one than we have now.

ribald:

12 Mar 2014 5:04:46pm

aah.. the IPA. If George Orwell was alive today, he wouldnt believe it himself to see how much the IPA has appropriated the language manipulation he warned us about in 1984 for their own devices. big brother would be impressed.

Ted:

12 Mar 2014 5:07:39pm

I find the tenor of this article to be almost child-like, or perhaps 1st year economics from the 1970s.

That the socialist, ie, communist, experiment in Europe was a dismal failure is not news to anybody but it provides an invalid reason to transfer every lesson learnt to our country in a different time under different circumstances. We are not struggling to find resources such that government intervention in some circumstances would some how impact adversely on other areas.

The allusions to welfare policy and the transfer of money within society would be pretty much on the money if both Hockey and Novak meant it. They do not. Hockey's end to the age of entitlement refers to his desire to attack the aged and the sick. He will not touch the scandalous middle class welfare payments which are dragging the country down because we can't afford them. Any comment from the IPA alone the same lines is equally invalid for the same reasons even though they have the option of directing their comments to where the real problem lies, and in the interest of intellectual honesty, should do so.

Hockey and the Government can chalk up comments like mine as ABC bias. Would it not be a breathe of fresh air if instead of attacking the ABC they had a read of what people are saying out there.

Alpo:

12 Mar 2014 6:04:54pm

"That the socialist, ie, communist, experiment in Europe was a dismal failure"... Ted, that's true, but what Julie fails to mention is that the Russians did try unrestrained capitalism with Boris Yeltsin (after the pro-Neoliberal politicians got bored of waiting for Gorbachev to speed things up). The People didn't like it and in the end rejected it. Now they are in a sort of mixed market situation coloured with a strong Russian Nationalism political paint.

DaveS:

12 Mar 2014 5:12:28pm

Thanks Julie , but for mine Hayek is the epitome of America , a selfish greed fuelled society that couldn't care less if the homeless freeze and poor don't eat. If this so called age of entitlement is to end , it should be from the top down.No fuel subsidies for mining , that's $4.5 BILLION saved. Ginas worth $11+ billion so it shouldn't matter. No more tax credits for building roads to and around you mine , that's around $150 Million. Cancel depreciation for oil and gas companies , that saves an estimated $6 BILLION up to 2016.Cadbury gives back its $12 Million + etc etc etc.Just because you work for a place that hates collectivism in any form doesn't mean its bad for all. If we as a society don't mind employers collectivising with Chambers of Commerce etc , why do you and your ilk think that the average Joe or Jill doing similar is sooooo wrong??As soon as Gina , Twiggy , Cadbury and Big Clive stop claiming rebates and credits , then you will have a point. Until then your scare mongering (your last line says it all) will be considered just that.

GregL:

12 Mar 2014 8:01:36pm

Dave you have hit the nail on the head. No one seems to mind the massive transfers made to the top end of town particularly mining. These are never identified by people like Novak but they hone in on the transfers to people of lesser means.

There is little doubt that there are a range of issues that need to be dealt with if we are to have a sustainable budget position and this includes revenues as well as expenditures. Both the Gillard and Rudd governments tried to shift some revenue with the mining tax and the carbon tax but look what happened, politics got in the way. It is the political spectrum not the economic spectrum that drives our day to day lives.

The biggest cause of the current structural deficit that we have today was born in the Howard/Costello years. Issues such as the tax treatment of superannuation is draining billions from our economy. Capital gains tax concessions are costing hundreds of millions in lost revenue; billions more in the family tax benefits going to people who should be able to look after themselves, billions to the private medical insurance rebates, the list goes on and on, let alone the upcoming parental leave scheme. Every time the labor party tried to reign any rorts in they were attacked continuously and I would say very successfully by Abbott and the industry rent seekers.

As Marxism failed to see the rise of the third class the middle class in my view Hayek failed to fully understand two human conditions; greed and power. He saw markets as pure they are not and never have been, and never will be. He also did not factor in the need for power amongst politicians. In the main in their quest for power our politicians invariably look at today and leave tomorrow to someone else.

As an aside had the world followed Hayek in 1929, we would still be in the Great Depression.

anote:

12 Mar 2014 9:34:11pm

"Just because you work for a place that hates collectivism in any form doesn't mean its bad for all."

It is common for successful people (not all or a majority but fairly common), to argue that what was good for them is good for every one. It applies to business, sport and other endeavours. It leads to a common obviously false expression of winners that 'if I can do it anyone can'.

In any race there is only one winner and we can see lots of evidence that lots of winners and even wannabe winners have little care for the rest ... and bypassing rules to become a winner is often seen as acceptable.

stephen:

12 Mar 2014 5:21:30pm

I agree with the thrust of this article, that 'collectivism' has, very unfortunately from past evidence, been a political disaster, a disaster which has really not been examined enough as a denominator for current European economic woes ... the EU, I am referring to here.(The Nazis tried to partition Europe only as to find the easy way to conquer her ; when they failed - and 45 years after the calamity - the re-integration, economically speaking, was the formation of the EU ... for political reasons, mostly, I would think. This has been, so far, though, bad for cultures)

But, specifically, the politics of uniformity is 'personality plumbing' : it is only in the welfare state (and the prisons, which are resembled, in a way) that our natures - good and bad - as social things via the workplace is not tested.Everybody on the dole is treated the same way, and everybody, eventually, succumbs to the desperation which can find solace only in the 'entitlement' mentality e.g. 'I want what they've got, and I've done nothing wrong to be so unhappy'

I've said that myself ... and it comes from anger, not selfishness or jealousy.

So I'm defending, really, the importance that the government has to come up with programs which do not isolate the unemployed from worthwhile work, whilst treating the unemployed as individuals.There is no reason why everybody in a dole office should be treated the same.We have different work experiences, different education qualifications, and so forth.So I think that a good step to 'unplumb' a desperate personality would be to have a separate office for younger people seeking work, another for younger professionals, and another specific unemployment bureau for the oldies like me.

Blaze:

12 Mar 2014 5:23:38pm

Dr Novak,

I think your argument regarding redistribution of "other's money" leads us to the logical and sensible conclusion that all taxation should be abolished forthwith.

As the wealthy have means of tax avoidance not available to those lower down the social rung, the set upon middle class not only have the indignity of having to work for a living but then see a large proportion of their income redistributed to the idle poor and the lazy rich through the provision of services and subsidies (fuel rebate anyone?, depreciation?). The last ten years in particular have seen increasing redistribution of wealth towards the wealthy that your man Hayek would not have anticipated.

If Governments stopped providing services of any type, the arrogant wealthy would at last be forced to carry their own weight in order to continue the lifestyle they have gotten used to enjoying at the expense of the downtrodden PAYG taxpayer. The clearest example of this lies in the GFC when Governments foolishly intervened to prevent the collapse of the financial system that supported the aristocrats of inherited wealth in their "all benefit at no cost" lifestyle. The losses were socialised after all profits had been privatised.

By withdrawing Government provision of education, health or infrastructure services we would rapidly see an improvement via privately financed hospitals, schools etc, as the layabout plutocrats rushed to ensure their own needs were met. Of course, many of the poor will perish from lack, but such has always been the case.

If miners need railways or roads, let them pay for them. If wealth needs protecting, let the wealthy employ private armies. In fact, why stop at taxation. Abolish the state altogether, as it is only a means by which the weak oppress the strong.

Peter of Melbourne:

Oh look the IPA... another pack of rentseekers preaching their own flawed vision for our future which does not even address the actual issues.

Well lets see, if our welfare bill is so high lets start by awarding all Government contracts to Australian SME's only.

Lets see how great Australian companies like Leighton Holdin... oh what the company is totally controlled by Spanish/German interests... but Leighton is an Australian company that is the impression they put forward publicly... anyways...

Our prison systems then, surely in privitisation there was legislation passed ensuring only fully Australian owned companies would provide the servic... hmmm just checked, guess not.

Oh what, the IPA is also a great advocate of globalisation in which the only real winners are multinational corporations and offshore tax havens. Maybe the IPA needs to include that big and bold on the front page of their website.

Artful Dodger:

Breach of peace:

12 Mar 2014 5:28:40pm

Australia is definitely on track without a doubt! The treacherous globalisation and privatisation agreed to by our politicians and corporations moving for cheap labour, less benefits or no benefits to workers, less tax and tax concessions, less stringent laws on corporations and fines from their pollution and environmental disasters have created the Perfect Storm for it.

We have been in the fast lane every since 9/11 to 'co-operate' with "our friends" the Fascist Americans and the ungodly treaties we sign with them will again be our undoing thanks to the politicians who are secretly dealing and signing contracts just like the way they did for gas fracking. There is less and less transparency, accountability with more secrecy particularly with the TPP which is well on our way to serfdom or slavery. The Australian Constitution surely has something to say about the Commonwealth of Australia and how successive governments have NOT acted in the best interests of this nation.

The great REDISTRIBUTION kicked into gear with the 2008 criminal acts of the banksters and Wall street white collar gangsters in allowing all of the criminal acts to take place. There are dozens of courts case of embezzlement and simply printing paper money like toilet paper will be useless! But being the docile and sub,missive 'client state' that we are will do as we are told to our nations detriment and national sovereignty. The communist ALP got us into untold debt with all of their scams and spending wildly and foolishly.

pigman:

LABCR-TV:

13 Mar 2014 1:09:54pm

It can be trusted on a small scale level, because we are the market economy.However, when you have big business, central bankers and colluding regulators who manipulate the markets, it all goes out the window.

My solution is to limit the size of businesses, get rid of globalisation and entitlements and tighten regulations severely.

Miss Information:

12 Mar 2014 5:30:17pm

"Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy. And an authority directing the whole economic system would be the most powerful monopolist imaginable."

Isn't the same true in reverse, what happens when the market controls the authority?

Or controls the authority by proxy.

Who's interests are served then....environment...no....welfare....no.....workers....no.....

Alpo:

12 Mar 2014 5:53:10pm

Hayek was wrong in believing that the unchecked market inevitably leads to the attainment of the best economic solution. He lost his battle with Keynes with regard to the reasons for the crash of 1929 and the Great Depression, and late in his life he even participated at the Mont Pelerin Society meeting held in Vina del Mar (Chile) in 1981. At the time, Chile was a bloody Fascist military dictatorship that was introducing free-market reforms based on Hajek and Friedman's ideas, with the result that in 1982 unemployment rate was 20.3%. So, as you can see, for him it was acceptable (or at least the best of a bad job) that the Road to Freedom be paved with the blood of the victims of a dictator, and a large number of unemployed workers.Ultimately, the Neoliberal revolution that he sparked and that Friedman truly took to the world with the aid of Reagan and Thatcher, ended up in tears in the international debacle of the GFC and it's consequences. I have my first edition, 1944 copy of "The Road to Serfdom" just in front of me (bought for just $4 in a second hand bookshop in Melbourne), and although in its pages it's easy to see Hajek's argument against Fascism and Communism, he failed to realise that keeping individuals isolated is not a guarantee of greater freedom, but an assurance of slavery through helplessness. Today, the great all-controlling Party has been replaced by the all-controlling Corporation, the Serfdom may be slightly more subtle, but it's equally effective nonetheless.

MulberryWriter:

12 Mar 2014 5:53:10pm

God help us all if this is the sort of idiocy masquerading as intelligent discussion we must be subject to with Abbott in power. The age of rampant materialism has impoverished the greater proportion of mankind and is on the way to destroying the planet on which we depend for survival a system predicated on exploitation ( businesses shifting production off short for greater profits as the ultimate life goal).

calyptorhynchus:

Reinhard:

12 Mar 2014 6:17:47pm

It seems the IPA have been busy this week, contributing two articles within two days, and both blatantly created a strawman argument. Any civilised society must be willing to help those who are not in a position to help themselves, so for Dr Novak to accuse such people of "helping themselves to others' money" is a deliberate distortion of reality.In fact if anyone is currently "helping themselves to others' money" it is the billionaire miners trying to destroy the mining tax and corporate CEOs whose base salaries have increased almost three times faster than inflation since 2002, to a level now at 70 times the average wageI also find it most interesting that Dr Novak should invoke the theories of Friedrich August Hayek, as there is a quote of his that I feel it quite apt in consideration of the recent politic. "Emergencies" have always been the pretext on which the safeguards of individual liberty have been eroded."

JohnnoH:

12 Mar 2014 6:22:27pm

Yes I agree Soviet Style Central Planning collapsed, but lets have a look at the alternative, where free market forces of the 1980's in the USA turned it from the worlds's largest creditor nation into the world's largest debtor nation and it is still the world's largest debtor nation.

Rob:

12 Mar 2014 6:30:50pm

'The Road to Serfdom" takes many paths- Were the kids down the coal mines in the 18th century not in serfdom? or the slave picking cotton in America's deep South not slaves?Where was "socialism": then.

I would agree extreme socialism can and did lead to serfdom -so did fascism and extreme capitalism.

The mistake Hayek made was to fail to account for the 'market's";ropensity towards monopolies and externalties.Would the 'free market" allow predatory business and lending practices? If not it would require a strong Government to guard against vested interests creating monopolies and such practices.

Love the last line 'The communist ALP got us into untold debt" Nothing about the 'capitalist' LNP which got us into even more untold debt with its debt driven economy.The debt trap was set n motion by Financial Capitalism with the removal of the gold standard in 1971- followed by the 'egineered: oil crisis;. Asian currency crisis; the interest rate hike by the US Fed Reserve; the dot-com bubble; the 1987 share crash; cheap credit which in Australia saw household debt treble; and of course the GFC and Austerity.Scams? what about the creation of the world wide financial machine of you beaut instruments of credit, securitisation, CDOs, junk bonds, fraudulent ratings-derivatives?Redistribution? oh yes- from the middle class, the working poor and the poor to the top 1%. Lots of wealth redistribution-upwards.

At least free marketers like Faber and Schiff have the nouse to call the collusion between Governments (of all kind) bankers and corporations for the evil it is.The author and the IPA have no such honesty. They are part of the big LIE.

Polly Wolly Doodle:

12 Mar 2014 6:41:16pm

Julie of the IPA,

Do you ever find it sad that the IPA opinions are now made up of a few odd, insignificant bits stuck to musty idelology like chewed-up gum to the underside of a classroom desk? These IPA articles come to us unbidden and out of the agenda of those who are your benefactors, but if you try to give opinion on something important, like long division, or how to address 'entitlement' in a broader sense, you cannot?

Artful Dodger:

12 Mar 2014 6:47:53pm

I take it by "collectivism" Julie Novak means the collective capitalist monopolies-that danger sure has not passed. And within the ' entitlement" thing expect she includes all those who benifit from tax expenditure.

As for the cult of the individual- everything in nature is connected and these clowns think an individual can do it all.Well- lets see Julie build her own roads. schools, treat her own ailments, trade with herself.

* Goldman Sachs--$164 million to move operations from Manhattan to Jersey City

The state of Michigan spends $6.65 billion every year on business incentives. That represents 30 cents out of every dollar in the state budget.

Ford recently announced its withdrawal from Geelong not because of excessive wages here (as the Libs would have us believe) but because they were promised $500 million by a US state to open up a plant there. Pretty simple decision really.

Some entitlements are a little more sacred than others, right Dr Novak?

Ravensclaw:

Lehan Ramsay:

12 Mar 2014 6:59:06pm

Retirees. These are the people of the post-war era. They lost their families in the war, and after that they worked really really hard to build the country back up again. They struggled without fathers to make families.

A pension is not welfare. It is a living allowance for people over the working age and it is more often than not paid for over the years in taxes. It was also promised to those people.

If this was a socialist country then we wouldn't need "welfare". But we have welfare, and we have it so that people with attitudes like this who look down upon certain kinds of people, won't employ them, don't support them, don't even have to pretend to. We are not a country of rich people with servants who should damn well work harder. We are a country of people, and the weakest of those people are supposedly supported by the stronger.

I find this kind of snottiness quite unbelievable. If you don't believe in welfare than get out there and help some people into the workplace. If you don't believe in welfare than volunteer at your local community organization and get your idle friends to do the same. If you don't believe in welfare than don't pay your taxes and let the local taxation office gently explain the system to you.

rockpicker:

12 Mar 2014 7:06:47pm

Yeah let's have no tax on 100K incomes, the poor folks can;t afford that. A good many of the things the IPA calls red tape are rules needed to prevent chicanery that the average person cannot find out about. Take the financial advisers who keep their hand in your pocket for years. The good old Republican boys. All tat tax we pay to Washington (Canberra, London etc) and then something goes wrong. How come the government ain't doing something??? Because you defunded that and left it to business.. guess what they don't care cause it doesn't make enough profit.Can't get your phone fixed, can't even call an electricity fault out of office hours (say Queanbeyan)? That would be he privatised bit.

Peter W:

12 Mar 2014 7:21:09pm

These fans of Hayek target individual recipients of welfare while conveniently ignoring the breathtaking levels of corporate welfare and protection in this country. This corporate dream run has enabled mining companies, banks, supermarkets, property developers and casino owners to prosper at our collective cost.

Clownfish:

Hank Moody:

12 Mar 2014 7:22:01pm

I'd argue that the evidence would suggest the biggest problem facing the globe is massive income inequality. But really, the Libertarian argument is a truly vacuous beast built on straw men and magical thinking. No matter the evidence to the contrary you will continue in your quest and quote the writings of people like Rand, Hayek as some form of proof for your misanthropic utopia.

Alan:

12 Mar 2014 7:25:36pm

If business had any morals or ethics, then there would be no need for regulation, it is very rare that a govt. imposes a regulation without there being perceived a need, usually to stop some shonk harming someone else.

Mark:

12 Mar 2014 7:32:23pm

"But if we face a monopolist we are at his mercy"This is the problem most big businesses in Australia have stopped competing; they offer goods and services at similar inflated prices. They have little or no intention of really competing ,they are collectively gouging consumers. Coles and Woolies come to mind as a prime example.This would be even worse if we removed regulation and went full free market, the outcome over time would always lead to a monopoly.After all a company is a collective, a collective of capital , the more capital you have the greater the collective power. Eventually you would buy up all the competition or drive it out of business without regulation to keep such entities in check.So collectivism is a danger the collectivism of capital which arises from the concentration of wealth into fewer and fewer hands.So Julie Novak and Friedrich Hayek's almost got it right they are just looking at it in terms of government and unions where the real danger lays in the mega corporations dominating the markets.

Radbug:

12 Mar 2014 7:40:50pm

"Constitution Of Liberty". In it, Hayek disparages the Gold Standard, claiming that since the US dollar "is" more stable than gold, then gold would be less desired than the US dollar. This was 1960, perhaps excusable. Come 1971 & all pretense that the US dollar was superior to gold had been discarded by Nixon. After 1971, did Hayek then print a retraction in a new edition of his oeuvre & embrace gold? No. So, after all his criticism of the Welfare State & Big Government, Hayek goes silent on the subject of Fiat Money. What a fraud! Equipped wiith Nixon's fiat money, Thatcher & Reagan created the largest fiat credit boom the world has ever seen. It crashed in 2007, resulting in the largest American money printing operation since the Continental dollar. Hayek's craven silence regarding the Americans slapping down Keynes when he proposed the Bancor at Bretton Woods in 1944 created the intellectual climate within which Washington could print money at its leisure in the years after WW2.

Alex Greenleaf:

12 Mar 2014 7:42:02pm

Leave all the rhetoric and mumblings of Hayek and everyone else for that matter and learn to speak Chinese. It used to be that when USA sneezed Australia(and most of the world caught cold).When China has a pain in the belly, the expulsion of digested waste around the world will be astounding! Reach for the date roll!

will_r:

12 Mar 2014 7:46:25pm

The true irony of the IPA's ridiculous, untested ideas is their co-opting of the word 'serf'.

Serfs were indentured labourers forced to work themselves into early graves and give a huge portion of their production to a dynastic elite. In theory, they could keep and sell any surplus. In practice, once their bellies were satisfied, the surplus didn't exist. But that was OK, because working for your betters, went the litany, was its own reward. There was virtue in subjugation to your dynastic betters.

Sounds eerily like something Gina would say.

We need to avoid the dangerous and untested ideas of the modern Right like the plague. If you don't believe they want a return to a struggling, short-lived underclass that supports an indolent class of inherited privilege, then you really need to get into the real world.

Liberace:

12 Mar 2014 7:48:00pm

I looked into Hayek, Rothbard, Ayn Rand, Von Misses, P.J. O'Rourke (even), etc. I conclude, for what its worth, that Libertarianism is great if your healthy, working/making money, and of the dominant social/racial class.Not so hot if you're disabled, unemployed, or from a minority group.For these people other systems are more appropriate because they are specifically catered for through the horrors of wealth redistribution, positive discrimination, and terrible controlling legislation.Another problem is this buyers and sellers 'getting it right' do only so for those two entities. People, lets say, who live near that aging Nuclear Reactor with all it's leaking and venting going on 24/7 are going to be affected by the decisions of the buyer and seller but have no input or control over the transaction. Yet may be devastated by the consequences of that transaction.To maintain anything else is just wishful thinking. That people in powerful positions are going to make the right ethical decision (as opposed to the best short to medium term commercial decision) is just plain ridiculous.Libertarians are wild-eyed zealots who need to calm down and get a grip.I have come to the certainty that a proper society is a blend of all these ideologies working in a dynamic flux that is forever changing over time so that the over riding principles of fairness and compassion is extended to all peoples of the world.Society will never be static, unless it is enslaved.

Jack:

12 Mar 2014 7:52:04pm

Here Here Lehan Ramsy!When you expresss your self from personal experience, then you speak from the heart and it has ressonance and it touches people! When you speak from your intellect without actual experience (you're just repeating other peoples expressions) you seem smart, intelligent but you reach nobody.

Todd:

Julie, a woman after my own heart. I wholeheartedly agree with this piece and indeed applaud the ABC for publishing it. Julie addressed the economic serfdom so comprehensively, I have nothing to add.

So, let me talk about the other, equally dangerous concept that Julie mentioned - lifestyle paternalism. This is having a profound impact on everyday life for so many. Sadly, many do not even see its effects. As we hurtle to the point where fundamental freedom of choice is a rare luxury, the very character of Australians is fast changing.

Back when I was younger, there were far less restrictions on personal decisions and therefore we had an innocent, happy, even if a little irreverent, culture. An altogether more friendly culture. Now there is far more judgement of others and it is due to collectivist thinking. When I was younger, if we ran out to catch the ice cream man after getting a dollar off Mum and Dad,that was just kids having fun. When I recently let my kids do the same, my daughter returned to say some lady admonished her and asked where her parents were whilst also commenting on my son and daughter's diet (she is in no way overweight) and warning her of the evils of sugar blah, blah, blah. This upset my daughter and my reaction was to advise the lady that, should she speak to my children again, I would apply for a restraining order. This, in turn, upset the interfering woman. I understand she thought she was doing the right thing and helping my kids' misguided parents and that is why society is to blame.

Specifically, collectivist thought is to blame. Many people out there don't think too much, they just do as they see or are told. Now with all the rhetoric that allowing your kids sugar is child abuse and all the obesity statistics and pushes for more lifestyle taxes (salt, sugar, fat taxes) the general pleb in the street feels it is their place to pass opinion and judgement on what always used to be private decisions.

Back to the point, I agree that collectivism, and more specifically, lifestyle paternalism, is hurting the character of our once care-free and peaceful nation. If the Government (and many NGOs) butted out of private citizens personal choices, then the average person on the street would be far less judgemental of others. Only then will tolerance increase across society rather than the collectivist version of tolerance (ie picking a group or a lifestyle that should be tolerated while shunning others). That is, the Left agenda today says that homosexuality will be tolerated, but not sugar. I make no judgements but to say "your choices are right for you." Full stop. Whether that be to enjoy an ice cream or to enjoy the company of the same sex.

A society must put individual freedom above all else if it aspires to be truly tolerant of all its members.

Seano:

13 Mar 2014 1:43:41pm

Perfect! That's exactly what I was trying to find a way to explain when I mentioned that there are two different components to this individual / collective equation.

Having had some time to read over others' comments and better understand what they interpret as the meaning of the essay, I get the impression that Dr Novak maybe advocating the 'bottom-up' style of economics, rather than freedoms. Top-down lifestyle paternalism, as you put it, does not benefit from economies of scale like top-down economics.

There are two different issues, and you've picked the most important one.

Shawshank:

12 Mar 2014 8:02:41pm

What an offensive load of tosh from yet another IPA hack. Free markets will never provide for the population and the greater good - it's an anathema. If so, next time there is a GFC due to unfettered and poorly regulated market capitalism, let them fail. In other words, don't bail the system out with taxpayer money. George W Bush is technically the biggest socialist in history as a result of bailing out the financial markets in response to the looming GFC his presidency and belief system brought in. What's the capitalist mantra - privatise your profits and socialise your losses!

PS. Hayek was a fraud who lauded the dictatorship of Pinochet and even was honoured by that evil regime.

Adam:

12 Mar 2014 8:06:12pm

I think the problem with near or completely free markets is that winners are able to use money/politics/power to distort the market in their favour. Look at all the lobby groups out there - almost none of them work for free to lobby for the interests of the nations poorest. No, they work to further promote the interests of their contributors.

Imagine an extreme where the eventual winners of the market are a handful of massive corporations. What would happen to competition, living standards and individual liberties then?

Consumer protection laws, national interest tests, welfare and other so-called red tape has tried to work to ensure that this extreme doesn't happen. There will always be winners and loses in a competition, but I have no problems with ensuring that the losers are given a fair chance and have some semblance of a reasonable living standard.

GrumpyOldMan:

12 Mar 2014 8:09:07pm

Once again we have this intellectual garbage from the IPA. Let me try, once again, to explain why conservative and free-market ideology is, and will always be, way off the mark.

We are about to start the new winter sporting season, and I would like to remind all conservatives and free-market supporters of the essential feature of ALL successful sporting teams, specifically the need for ALL team members to place the needs of the team ahead of their own individual needs. That is 'members of a champion team' must commit to the fundamental principle of 'collectivism' rather than the fundamental principles of 'individualism' that would exist in a 'team of champions'.

So, does Julie Novak and the IPA believe a 'team of champions', whose members are all committed to satisfying their own individual needs and goals, will beat a 'champion team' whose members are all committed to satisfying common needs and common team goals? Unfortunately for conservatives, Novak and the IPA, their 'team of champions' will get thrashed regularly.

The problem for conservatives is that they equate 'common goals' or 'collectivism' with lowest common denominator goals and aspirations. This is NEVER the case in a successful 'champion team'. The 'common goals' of a successful team are invariably set far above what individual team members could possibly achieve on their own.

So, what is wrong with the principle of collectivism as applied to sport? And why would that exact same principle not work in the Australian economy - provided of course that the 'common goals' were set very high?

And who should set those challenging 'common goals'? Nobody, big business, bludgers, a lazy government that really doesn't want to be involved in the economy at all, or a truly national government with a long-term vision and an inspirational leader with a commitment to encouraging ALL Australians to participate in achieving those goals.

John51:

12 Mar 2014 9:24:44pm

GOM, I always find it interesting this argument of individualism over the collective or community. After all we have evolved as social beings for millions of years. Our knowledge systems as well as our survival and development into our current civilization is based on us being a social collective.

We aren't left to be born on our own as some species are. In fact our very survival depends for many years on not only the protection of our parents, our family, extended family and community. Our capacity to learn how to live and survive in this world depends on our social relationship to all of the above. We in fact form our relationship to the world through all of the above, through that family and community.

Our civilization has evolved based on the knowledge passed down from generation built on all past knowledge about our world. We do not come into this world and have to rediscover all of that knowledge each generation. It is pasted on to us and hopefully we add to it and pass it on to the next generation. That is the nature of being a social being, and part of the larger collective.

GrumpyOldMan:

13 Mar 2014 9:51:29am

John51, I find this "argument of individualism over collective" just plain insane and a certain recipe for returning us all to serfdom rather than rescuing us from it.

Yet it seems to be impossible to get any conservative or free-market advocate, like the so called academics in the IPA, to explain why individualism will do anything other than the collapse of civil society and the creation of a state of continual conflict between self-appointed war lords (or individuals).

I reckon this 'individualism fad' driven by vacuous conservative, free-market ideologies and Abbott supporters is a major factor in the anti-science movement and climate change denial industry, because science is perhaps one of the best examples of collectivism. The irony of that is that the collectivism that keeps driving science ever forward also celebrates, and depends on, the individualism of great scientists like Galileo, Darwin and Einstein. But that individualism is always tempered by the peer review process which protects the quality of the product produced by the collective from incompetence, quackery, commercial interference and opportunism. Surely human society in general should embrace the model developed over many centuries by the scientific community, not denigrate collectivism and rip our civil society apart to suit the self-interests of a bunch of unidentified IPA's clients, or to align with the intellectual deficits of a 'failed monk'.

So, from my point of view, 'collectivism' which encourages and celebrates, yet regulates, 'individualism' is essential for the evolution of human society, and even the long-term sustainability of human life on this planet.

John51:

GOM, agreed, but the interesting thing of even individuals like Galileo, Darwin and Einstein did not make their discoveries in isolation from the rest of humanity or human knowledge.

For a start they had the skills and knowledge sets to embark on their discoveries from the knowledge past down to them from past generations. Second when you look at the history of their discoveries they were not working on their own even if they seemed to be arguing against the known knowledge of the day. Their were always others in the past or at the time who were working on similar theories or components of those theories.

And today knowledge expands at the rate it does because of speed in which knowledge is shared. And because of that speed it brings about feedback loops into each others research. When you start to look at the process you can see the complex interaction that goes on in both the sharing of knowledge as well as stimulating new areas of approach or research.

All of that demonstrates how the complexity of the collective drives changes if it is allowed to. If instead you have dictatorial oppression of that process by the power of the day trying to preserve their own power and influence that that process breaks down. Dictatorial power is the opposite of a collective complexly interacting in a manner that drives change. It does the opposite in trying to control repress change to suit its own holding and maintaining of power.

You can achieve that by simply distorting knowledge to suit your own objectives. It is like the focus of the market on competition. In evolution theory competition is only one of the processes of evolution. Just as important if not more important is collaboration and mutualism. And even more important is the way those three process work together in a complex interaction. To treat them as separate process in isolation from each other is to misunderstand the way they drive evolution at all levels.

As I have said before more than once economists should also study biology and especially ecology. Human society is after all an ecosystem functioning with and within other ecosystems.

foxlike:

12 Mar 2014 8:09:18pm

Centrally controlled collectivism is bad? Even when it's called capitalism? The idea that freedom is a marketable commodity is just stupid: the best societies are those with a healthy balance and commitment to both the collective good, and personal liberty. Either achieving dominance over the other is not healthy, nor is it freedom.

And freedom means? - freedom to, freedom from, and freedom of. So you want freedom to exploit me, but I want freedom from your exploitation. You want freedom to run the country, I want freedom to stop you abusing power in ways that damages me and my life.

The Institute of Public Affairs is a clubhouse for extremist thinkers pretending they are all about freedom. Aren't you lucky you are in a country where you are free to think and speak and publish and no-one comes around in jackboots at 4am to sort you out. Yet.

Mitor the Bold:

12 Mar 2014 8:10:12pm

If we'd taken Hayek on his ideas in 1944 we wouldn't have universal healthcare and education free at the point of access today. I know Abbott and Hockey don't want us to have these things anymore but I reckon most Australians value these far above any ideas about serfdom.

We don't need to imagine what countries would be like without such socialist redistributive measures as education, healthcare and a welfare safety net - it was the West prior to WW2, and it is much of the world outside of the OECD today. South America, Africa, Middle East anyone?

The only thing worse than welfare is no welfare. It's not just your money if you earn it in a society - you have obligations in that society to pay for a stable, equitable environment that makes it a nice place to be. Life in compounds behind razor wire with armed security might be some wealthy people's idea of rich living but I don't think it's most Australians'. Why should we sacrifice our collective prosperity so that a few individuals can live like emperors?

Razget:

And means testing of medicare rebates is inevitable because Australians err more towards conservatism than swedenism.

Education isn't far behind, one day it will be means tested also. In WA the government recently reformed policy towards foreign workers so that they would have to pay for each childs education, which was estimated at $15000 per year.

There really isn't any good reason why someone/families earning over $100k a year should basically be paying at least double digit % of that figure.

Government fails, they have good intentions, but they fail. WA built a new $130 million dollar hospital in my town, but theres never more than 1 doctor and nurse on...but theres like 3 admin ladies to make sure you fill in your form. And then you wait for 2h +, its a waste of time, unless your dying or having a baby.

I had a problem that I couldn't get seen because of triage, I would have literally paid $200-500 to just see a doctor that night, nothing on offer tho, its just a government bureaucracy, not a market driven service.

So I eventually saw a gp, got advice, they said theres no qualified ultrasound person around for a month. I gave up and never went there again, waste of time.

Mitor the Bold:

13 Mar 2014 7:43:49am

I've read your post three times now and I still have no idea what you're trying to say, other than that you once had a bad experience in A&E. On that basis you appear to have formed an entire economic and political theory. I'll bet it also involves stopping boats.

bob:

12 Mar 2014 8:26:52pm

So half the economy is government (including redistribution) and the other half is free market (including scrabble to the top). Hmmmm half and half, the middle way..... it seems to work ok. very bhuddist!

andries g:

12 Mar 2014 9:00:43pm

Do we still live in the country of the fair-go or are we heading for the country of the fair-gone? Corporate Welfare, for starters, needs to cease and tenured opinion makers on astronomical (compared to mist workers) salaries. The days of Dickens and the deplorable working conditions of the time must not return.

Hudson Godfrey:

Brian O:

12 Mar 2014 9:02:06pm

I can point out the times when Hayek was totally wrong (No, Britain did not descend into totalitarianism in the 1950s because they introduced the NHS), or his fondness for fascists, but I'd rather peer into the libertarian metaphysic, namely the belief in markets as the inevitable outcome of sane, sensible "rational actors", which has no basis in biology or even philosophy. Any assessment of human affairs reveals the bipedal primate to have no more "reason" or "rationality" than a baboon on heat. Libertarians, however, are stuck with their 17th century view of our species, and so continue bombard sensible people (there are a few) ideological gibberish. I'm glad that so many readers can see through this outdated propaganda.

Ginykiny:

12 Mar 2014 9:17:24pm

If the market place is so efficient why doesn't the LNP start cutting welfare by scrapping private health insurance subsidies, childcare rebates.......not to mention the planned paid parental leave scheme. Surely if private businesses valued their employees they would include these as part of their salary package rather than relying on Government handouts and have faith in the market adjusting to/rewarding their foresight. Mind you businesses would probably then just ask for an even more dramatic tax break(Government handout). Isn't it about time that it is acknowledged economic markets do not exist in isolation but as part of a complex political, social and environmental whole.

Anne T:

Goodness, that is a naive and simplistic view of economics, putting forward two possibilities when there are diverse forms of capitalism that exist.

There is also the usual IPA scaremongering achieved by conflating communism and socialism but I have noticed that the IPA are not unduly bothered by subtlety in their arguments.

I suppose that this is the IPA's effort in response to Gina Rinehart's ringing endorsement of Thatcherism.

In Whapshot's dual biography of Keynes and Hayek, he points out how Hayek distanced himself from Thatcherism even though Thatcher thought she was introducing Hayekian economics.

As for serfdom, what do you call the current state where so many Australians endure the uncertainty of low paid casualised work with little hope of ever having secure employment? Feels awfully like serfdom and yet the current Australian economy draws on many of Hayek's economic principles mixed up with the dogma of the Chicago School.

Oh right, just remembered. Who do I think I am? I am sounding as though employment is some sort of entitlement.

Factsseeker:

12 Mar 2014 9:25:03pm

Before we resort to the broad brush of labelling all welfare recipients as 'living off other people's money', we have to remember that this country has a history. Employment conditions were very different even 50 years ago. Today, it is easy to look at centrelink pensioners and accuse of them of not providing for themselves. That is completely misguided because it is viewed through the lens of today's circumstances. Things were completly different then. Firstly, there were very few pension schemes and if there were, companies only contributed a few % of salary. Today, companies are mandated to contribute 9% growing to 12% of an employees wage to a persion fund. Real salaries are 300% higher today than they were in the 1940's and 1950's. People worked hard then for little pay to build this country. Today, the average worker is relatively wealthy in aus and after necessities, has much more extra money they can save or spend on luxuries. At that time, all the money the parent(s) earned went on necessities for their family. Taxes, were also relatively higher then. There was no subsidised child care so that mothers could go and work and earn eaxtra income for the family. There was no free education like was introduced under the Hawke government. No Child support grants. No universal medicare. The only thing workers from that time could look forward to was their government pension. Today, Centrelink pensioners do not live the high life. If they don't own their own home, life is a struggle. Australian pensioners have earned their government benefits. They are not bludgers. There are also younger people who are on benefits today who are genuinely unable to earn a living. They can only survive living off benefits. In a civilised, wealthy society such as ours we cannot turn our back on these needy human beings.

the nose:

12 Mar 2014 9:31:07pm

Wow! 400,000 copies sold in the USA alone!Population 380 mill approx. at a rough guess that would be about 0.12 percent of the population wow!The top 1 percent have most of the wealth, so guess whose buying the book! I hope they now feel vindicated, and can go about their business with a clear conscience.

Evan:

12 Mar 2014 9:37:25pm

Good grief.

I'd rather have regulations about food safety. And I prefer minimum rates of pay in Aus to the situation in the US. (Talk to friends from their, make some on social media if you have access to it.) We are not worse off here than in the US.

Hayek neglects the power differentials between individuals and collectives. How are the powers of corporate collectives to be resisted by individuals. The corporate collectives are just as dangerous as government - and considerably less accountable. Hayek doesn't see some collectives.

Nations like Australia aren't more enslaved than those with small government. In some things we are more fortunate (though not all).

This kind of vicious individualism based on resentment and entitlement (see Nietzsche on slave morality for a brilliant exploration of it) is really vile.

EvilGenius:

12 Mar 2014 10:15:42pm

The IPA and people like Julie Novak have a massive case of cognitive dissonance and here is the evidence.

After WWII the western world for a period of over 35 years saw a massive rise in living standards, economic growth and prosperity DESPITE the fact that there were all these nasty regulations and such. The welfare state was minimal in the US but the UK and other nations who embraced a socialised form of economic distribution all did rather well during this time. Btw right whingers, this is an indisputable fact.

Yet with the rise of neo-conservatism who's main evangelist was Milton Friedman plus the coming to power of Reagan & Thatcher in the early 1980's, we;; we've seen the inequality widen, the middle class being hollowed out and the general decline of western power.

GrahamD:

12 Mar 2014 10:21:52pm

"To prohibit the use of certain poisonous substances, or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition. The only question here is whether in the particular instance the advantages gained are greater than the social costs they impose."

"Nor can certain harmful effects of deforestation, of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question, or to those willing to submit to the damage for an agreed compensation"

"Even the most essential prerequisite of its [the market's] proper functioning, the prevention of fraud and deception (including exploitation of ignorance), provides a great and by no means fully accomplished object of legislative activity"

"There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision"

GrumpyOldMan:

12 Mar 2014 11:07:05pm

Here's a little challenge for you Novak. Get Hayek's theories put through a standard economic model, and tell us how quickly the gap between the rich and the poor widens.

Unless you can clearly demonstrate that Hayek's theories won't eventually lead to the collapse of civil society and the outbreak of war between labour and capital, then you can stick your theories right up your IPA's client's jumpers!

We just do not need divisive and destructive policies in this country. Nor do we need organisations like the IPA which are intent on driving a huge ideological and economic wedge through the very heart of our civil society.

Clifford Smith:

12 Mar 2014 11:27:03pm

Really? The 'Road to Serfdom' is as pertinent to 2014 Australia as it was in 1944? Nothing about the Australian political economy today is in any way reflective of or analgous to the assumption of State power over the economy in western nations during and after WW2 - in either kind or magnitude. What evidence is there of increasing collectivisation, of increased central planning? Furthermore, are there ANY historical examples of Government welfare programs in any way serving as a decisive cause of authoritarianism or totalitarianism? In the case of Germany and Russia it was World War 1 that set them on the road to serfdom, not pensions or universal healthcare... yet you won't see anyone on the right penning Hayekian Jeremiads when we commemorate its centenary this August. Quite the opposite will be the case, I predict.

Chris:

12 Mar 2014 11:49:13pm

I am not much interested in political theory. When I was at uni in the late 60s, the people who advocated collective action and grand government schemes were "lefties" or radicals as they were called in those days. They were not nice or decent people. They were trenchant critics of the status quo; biters of the hand that fed them; had no gratitude for the (free) education we received and the meal ticket for life they were given; contemptuous of the taxpayer and workers; you couldn't disagree with them, or even ask a question without being ridiculed or deep frozen for good; they argued and quibbled with Liberal politicians without listening if they were ever allowed to speak (not often); they mindfully controlled the campus press to monopolise content; used the language of democracy, without a trace of the democratic instinct or feeling. That is not a bad start, hey. I won't bore you with the stinking and offensive love of money the left lawyers displayed the moment they got into legal practice. So, if they were for collectivism, you know who it benefits, and it is not the poor and disadvantaged, it is for those who control it. You can never get away from bad character, and that was the hallmark of those people.

aussie in japan:

13 Mar 2014 12:52:14am

money is just a mechanism for the exchange of goods. The aborigines did very well without it and had a society which seems to have been based on simple values such as helping each other out; an ideal which many kids programs advocate.

I wonder why it has to be that once you become an adult you throw those precepts away and money becomes the sole way of valuing the individual and society.

We all know that basing values on money is hollow and unnatural. When societies fail to support those who are supposed to participate then that society is not a society but rather a clique for a selected few.

It seems as though we are becoming a country of cliques rather than a society when we base our ideas on money.

Murphy:

'Nobody but the most ardent socialist would have imagined, in 1944, that Western government spending would account for 35 to 50 per cent of national income.'

What do you expect when,

Howard's mob shifted responsibility for smashed body part damage off the employer onto the public funded health and pension systems?

The GFC stole many an aged life savings, forcing them to back onto pensions.

Food products making people more unwell, again requiring more health care. There is a reason elderly don't eat fast food industry product, it hurts! A Colonoscopy is a six month waiting list and again the pain relief and antibiotic costs are health care related, of which the public pay whilst the offshore corporate collectivism siphons off mega profits.

Shall we talk about the burden of accumulating pollution on heath care costs? Didn't think so.

aussie in japan:

Friedrich's whole rational is based on a lack of understanding of what contributed to the existence of serfs. Julie your whole argument is based on dangerous false premises

Serfdom in the 11th century was based on the elite having access to information that the lower classes weren't.

The greatest cause to us becoming serfs again is the power if the current elite to control information flows so that we are not able to make good decisions.

Good decisions come from two things. The first is an educated population who has the ability to make logical informed decisions.

With the down sizing of social studies and it's systematic replacement with economics we no longer supposed to make decisions based on what is good for society but what is good for the economy. Education has blurred the difference between the people society and the money society.

The second is the free flow of the knowledge of what kind of decisions which are being made and how they affect us. Decisions made behind closed doors seal our fate to a world of serfdom.

catnipped:

13 Mar 2014 2:57:26am

Hayek said he would "prefer to sacrifice democracy temporarily, I repeat temporarily, rather than have to do without liberty, even if only for a while" and was full of praise for Pinochet, saying "it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement". I think those comments speak for themselves.

I don't think it's any coincidence that the countries that rate highest for standard of living have a welfare state and universal healthcare. Even the IMF now admits that a low rate of income inequality is good for growth.

And if the IPA hates government funding so much, maybe they should stop spruiking their right-wing libertarian horses*** through government funded media.

Mark James:

catnipped:

13 Mar 2014 2:09:27pm

Indeed. Don't use roads, refuse medical care (even private hospitals, because a fair chunk of medical research is publicly funded), don't accept money from the ABC for writing articles and don't use a computer or smartphone because most operating systems wouldn't exist without the hard work done by publicly funded universities in California.

Cafe:

What a total disregard for the facts this aricle represents. Is there no bounds to the arrogance represented by the likes of the IPA?

Lets talk about the real "wealth re-distribution" that is going on.

Since the 1970's wages have not been keeping up with productivity gain, meaning that the profit derived from the productivity is being re-distributed into the employer's pocket.

This structural welfare distribution to the top end of town is the real problem our middle class face. As our salaries lose ground in real terms and services are withdrawn, we get mired in more and more debt...money provided by the 1% to make up for the shortfall in our salaries, with a hefty interest rate thrown in. Talk about a double whammy!

I am sick and tired of the likes of the IPA, apologists for this sort of real wealth re-distribution, putting up failed arguments about free market capitalism.

The fact is that as individuals we have no real power in this game and our government, supposedly our voice at the negotiating table, has been bought by the 1%.

Were unions perfect? No. But without some counterbalance to the war that is being waged on the middle class, as individuals we will fall. Collective action in the face of such economic prejudice is required.

Pat Crosby:

13 Mar 2014 3:35:07am

Suffice to repeat what Anatole France wrote of then and surely applicable now: 'The law, in its majestic equality forbids the rich as well as the poor to sleep under bridges, beg in the streets and steal bread.' And then there was a revolution. Tsk. Tsk.

Dave:

Communism gets you there right away. Capitalism just takes a little bit longer.

Capitalism is just a poker game - in the beginning it looks great for everyone. At the end it looks good for just a couple people.

Hayek probably didn't have the benefit of knowing what large large corporate mergers achieve. - The consolidation of a lot of power in a few hands (totalitarianism). 5% of corporation controlled 90% of wealth in 2010.

If you are going to be a serf - what type of serf would you rather be?

One that is owned by a corporation? or one that elects an official (democracy).

I would rather have a democracy which controls capitalism so that the poker game lasts a long time (socialism).

Grant Poulton:

13 Mar 2014 7:30:39am

If only the world were as perfectable as Dr Novak assumes and as simple as she writes. Having heard Hayek's lectures as a student in England, his ideas have a charming superficiality that seems to appeal only too easily to those unwillimg to acknowledge persistent market failures and the neglect of relevant externalities. Which market mechanism, Dr Novak, is responsible for fixing social problems? Oh that is right, there is no such thing as society! Give me a break from this juvenilia.

catnipped:

13 Mar 2014 11:47:05am

That's the problem with right-wing libertarianism and anarcho-capitalism - it either pretends that society doesn't exist, or it holds outright contempt for it because its consequences would be disastrous for so many people.

Clownfish:

Cue the indignant squealing of a collective of infants, at even the thought that the government teat might be prised from their greedily sucking mouths.

No wonder so many of them liked the godawful 'skywhale': a hideous, bloated monstrosity, full of hot air, floating in the heavens and tantalisingly dangling its teats at the eager gawpers below.

But if you want the paradigm example of how the welfare state ultimately destroys the very working people it proclaims to benefit, one need only look at Britain. As Nick Cohen, among others, has pointed out, the intervention of the state into every aspect of working peoples' lives has generated a raft of incentives that have perversely acted to wreck the fabric of working communities.

catnipped:

13 Mar 2014 12:35:34pm

Before the GFC hit, Britain had an unemployment rate around 5%. Welfare was not the cause of the GFC. Countries that rate highly for standard of living (Australia, Canada, NZ, Scandinavian countries, etc.) generally have a strong welfare state. Obviously there are those that don't need welfare who receive it in Australia (e.g., middle class welfare, corporate welfare) but I would hardly call poor people greedy.

Clownfish:

13 Mar 2014 12:56:08pm

I didn't call poor people greedy, nor did I say anything like that the GFC was caused by welfare - although there, you would have some argument that 'social welfare' policies in the US certainly contributed to its root cause, by providing perverse incentives for predatory lenders.

catnipped:

13 Mar 2014 1:31:41pm

This comment - "Cue the indignant squealing of a collective of infants, at even the thought that the government teat might be prised from their greedily sucking mouths" - implies that welfare recipients are greedy. So who are the ones with "greedily sucking mouths"?

Yes, it wasn't welfare policy that caused the GFC, it was the predatory lending practices of the banks (although of course there is still some onus on the person taking out the loan), along with a massive housing bubble. If welfare policy was the root problem, Australia would be in trouble, as would Canada, Norway, etc.

Clownfish:

13 Mar 2014 2:47:37pm

If you read my comment, you will see that I acknowledged the predatory lending - and that it was actually encouraged by successive US 'social welfare' policies, all with the good intention of encouraging home ownership among poorer groups.

But, as the saying goes, the road to Hell is paved with good intentions.

'who are the ones with "greedily sucking mouths"?'

Everyone from the generational unemployed, to middle-class welfare recipients, to rent-seeking corporations, lining up for government handouts.

Daniel:

13 Mar 2014 9:11:13am

The assumption underlying this argument is that without government forceful redistribution people will receive reward appropriate to their contribution. But without intervention markets are easily distorted by money. Those with wealth can leverage that to build monopolies, or skew bargaining in their favour. Quickly you find increasing amounts of Rents flowing to the top. Libertarians claim that redistribution through tax is theft but so is Rent. The 'natural' state has those with power forcefully taking a larger share of profits than they earn with their contribution to production. Progressive taxation and redistribution helps correct that imbalance (it's possible for it to go too far in theory but Australias current wealth imbalance suggests it doesn't go far enough). Allowing workers to regain some of the profits of their labour forced from them by the powerful.

Rosey:

13 Mar 2014 9:13:04am

Could verbal and written commentary by the IPA on the ABC please be accompanied by the disclosure of their major sponsors? This nonsense is nothing more than paid propaganda and viewers / readers need to be made fully aware of that. In the interest of fair and open debate, the ABC at least needs to ensure that the source of the money behind opinions expressed by organizations such as the IPA is clearly disclosed. This should of course apply to both sides of politics.

DavidR:

13 Mar 2014 9:34:04am

"welfare transfers, would account for the 35 to 50 per cent of national income that Western economies" and since Western economies are the most rich and powerful in the word, we must conclude that welfare is the reason that is so.

Check mate, Novak, Your move.

Or perhaps you think such simplistic reasoning is specious? Then you should revise your article.

Professor Rosseforp:

13 Mar 2014 10:02:56am

"extensive economic interventions by government suppresses the ability of individuals to make their own choices, and this leads to several dire consequences" -- dire consequences such as aged pensions, disability pensions, universal medical care, universal education, full employment, good public transport, cheap utilities, cheap food, strong manufacturing sector.Yes, these are all fairly frightening prospects!

Jeff:

13 Mar 2014 10:10:10am

The European social democracies of Germany, Sweden, Norway, Denmark, Finland are good evidence that the argument in this article is false. These social democratic countries show that modest wealth redistribution does not lead to serfdom, but instead to a better society that protects and empowers its citizens. The standard of living and health for most people in these social democratic countries is clearly superior to the more free-market English speaking countries.

The neoliberal ideology of Hayek and others leads to an increase in economic inequality and dominance of the political system by a wealthy elite. Neoliberal ideology is therefore a grave threat to our democracy.

Alpo:

13 Mar 2014 11:08:24am

"These social democratic countries show that modest wealth redistribution does not lead to serfdom, but instead to a better society that protects and empowers its citizens.".... Jeff, they know that at IPA, mate. But they are not "stupid", because they also know that if they say that in public the money will dry out and they will all be unemployed the following day. I mean, they have got bills to pay and mouths to feed after all, you know?

CharlieB:

13 Mar 2014 10:18:17am

Novak's (and others) opinion about what is economically good and bad are often based on fallacies.A couple of examples from this article.

Novak writes; "A central theme of Hayek's The Road to Serfdom is that extensive economic interventions by government suppresses the ability of individuals to make their own choices, and this leads to several dire consequences." She conveniently ignores the idea that poverty has a much greater influence on suppressing the ability of individuals to make their own choices. There are many who are disabled or unfortunate who need social welfare to have an acceptable standard of life.

Novak also writes; "Markets allow such economic decisions to be made to the mutual benefit of buyer and seller." That is only true when buyer and seller have similar economic power in the transaction. In reality, most corporations simply make economic decisions in there own interest - just because they can.

smicko:

13 Mar 2014 10:43:15am

I think most fair-minded people agree about the need for some redistribution for the most vulnerable and that there is a legitimate role for government to play as a kind of umpire or arbiter of last resort when the markets throw up inevitable distortions.Just think of the monopoly Coles and woollies now have. Is this real competition, I ask? We might soon have to rebrand the nation as 'Coles Australia' and describe ourselves as 'Coles Australians' if they continue to expand into more and more areas of the economy.The real threat to our freedoms comes from over-regulation however - and this is where governments are most dangerous be they left or right. We should remember that our western style democracies are not a given - in fact they are a recent and historical anomaly. The road to serfdom is the more travelled route by far. It is imperative that a politically-informed public remain engaged and vigilant over the people we empower to govern us in our name.

blax5:

13 Mar 2014 10:44:32am

You write: "Nobody but the most ardent socialist would have imagined, in 1944, that government fiscal activities, predominated by welfare transfers, would account for the 35 to 50 per cent of national income that Western economies experience today." In 1944 there were about 2 billion people on this planet, today there are more than 7 billion.

Population growth has been higher than the capacity to develop livelihoods. In a free Darwinian market based system it's 'swim or drown' but the laws of humanity demand that society does not let those who cannot swim simply drown. Once a person is born (or for the religious conceived) "it" has a right to life. If the mother/parents cannot feed the child, he/she is still entitled to eat. If the child has bad parents who don't educate it, it is still entitled to be educated - and this is for our own sake because illiterate people are a problem for society. It is not the child's fault when the parents are not meeting their obligations.

I would not claim to have all the answers but I believe that the population bomb (amongst other things) has indeed gone off and caused this oversupply of people.

While it is not possible to have livelihoods for everyone and it is not possible for everyone (on current wages) to become a self-funded retiree, but the idea of letting the oversupply drown is rejected, the right to life philosophy has resulted in the concept of entitlements, since the idea to return to Dickensian circumstances is not favoured by all.

If the Age of Entitlements is over for individuals, why is it not over for countries? Reports about Ukraine suggest they are entitled to billions from the rest of the world.

foolking:

13 Mar 2014 10:55:42am

Who woulld you rather have monopolize a utility, a government with checks and balances that can privatise lower tiers or a multinational? Profit to be redistributed to the taxpayer or off to a multinationals coffers? Again the author seems to think people are inherently lazy, how convenient. some are, as is your arguement. Removing empathy is not a fix all.

OUB :

13 Mar 2014 3:56:59pm

Bit of a toss-up really. In government hands monopolies become overmanned, union-dominated, inefficient businesses with no incentive to innovate. In private hands not much better. Perhaps privately-owned monopolies would be subject to price caps imposed by regulators and that might spur some efficiencies, particularly if there were noisy shareholders.

volkovic:

13 Mar 2014 11:15:14am

Latest Novak article is a clear lesson to readers and writers on this Forum that IPA is an ideological institution eager on spreading dogma at the expense of good science.

Hayek was only writing a "NEW BIBLE" for free marketeers to be used as a weapon against the Keynesian economists in the United States and against Social Democracy in Western Europe (more government spending, more regulation of the economy). It has NO SCIENTIFIC BASIS whatsoever since it completely ignores the historical facts in creation of multi-billionaires and their vast wealth in America. In ALL historical cases of the creation and accumulation of wealth by billionaires getting THE CONTROL of government and politicians was of primary importance. The corporate welfare, the help and active assistance by the politicians through legal protection and through government contracts was logical necessity for enrichment of nearly ALL of todays billionaires. Most of whom, of course, had become billionaires by inheriting vast fortunes, receiving protection through inheritance laws.

ROAD TO SERFDOM was written with a blind eye of what was happening THEN and what is happening today to welfare recipients in capitalist countries. Serfdom is all right if you impose it upon the millions of the poor, but asking the billionaires to become socially responsible is thought to be against FREEDOM, against the so called improved "productivity". Now since the social and environmental problems had escalated after the WW II ... and the social and environmental problems are still multiplying drastically here and in the world... logic then calls the State to intervene to solve these problems, the budgetary burden becomes too high, which only shows you very clearly that free market economy left to itself is likely to SELF DESTRUCT at a very short notice without the government help.

Alpo:

13 Mar 2014 11:52:34am

"Latest Novak article is a clear lesson to readers and writers on this Forum that IPA is an ideological institution eager on spreading dogma at the expense of good science."... We already know that, volk. But it's great fun to poke the poor arguments of these IPA characters with some sharp sarcasm....

Mike (the other one):

13 Mar 2014 11:59:29am

Interesting article but all the way through it I could have applied the principles to either a handful of controlling capitalists or a handful of controlling communists. So, ultimately it potentially comes down to serfdom to which system?

Allowing the extreme left or the extreme right to run anything is extremely dangerous for the average citizen which is most of us.

It's about balance. Balance in society and being in balance with our life support system, this planet.

PS - Hayek's book was written in 1944 as Julie points out. The world was a vastly different place then and world population has nearly trebled in the interim - a very real game changer with a multitude of new problems facing us.

OUB :

13 Mar 2014 3:32:45pm

Can I politely suggest that when people talk about a balanced approach they are admitting that they have no guiding philosophies by which to judge policy? They are people who would rather not rock the boat, let things drift along, avert their eyes from issues rather than address them, pleased to congratulate themselves as small L liberals but really believing in nothing. Not trying to be offensive but that is what I see as the curse of the liberal. For myself I would prefer to see dries in power. At least they have ideas that can be put up and tested. Small L liberals end up being purely reactive. That is no way to run a government IMO.

PS The world has changed but humans not so much. We still react to the same stimuli and are subject to the same weaknesses that Hayek has apparently outlined. I am not a fan of rapid population growth.

PS I like the tone of your reply. It is a pity so many here refuse to address the content of a piece written in easy to understand terms.

graazt:

"when people talk about a balanced approach they are admitting that they have no guiding philosophies by which to judge policy?"

A point well made by Nietzsche I recall, who despised such shadow people.

On the other hand, if we were all completely fixated with our preferred utopianisms, without regard for evidence then things could sure be a lot worse.

"Small l" liberalism has far more philosophical weight behind it than economic rationalism, or supply-side economics. It's the well-spring from which both conservatism and progressivism draw their sustenance.

Unfortunately its principles have been assailed by both with the passage of time. But, like Austrian school economics, it's still there. :)

I do agree with you, humans haven't changed so much. Possibly never will.

LABCR-TV:

Bolirvia:

13 Mar 2014 12:18:12pm

I suppose this sort of ideological venting is the price of the ABC quest for balance. Hayak was always arguing from an evidence-free position. That was the basis of the Austrian School of economists. Nothing has changed. The IPA methods continue the tradition. Perhaps you would like to take a look at measures of life satisfaction, health and well-being and their relationship with government intervention in the economy. I think the evidence will tell you that those who feel like serfs are more likely to be found in countries with a minimalist government role in addressing income inequality. Hayak's "serfs" seem to be having a better life.

AniaPL:

13 Mar 2014 12:31:23pm

Hayek's ideas would make sense even today, had capitalism morphed into some meritocratic socio-economic system and outshone clumsy communism. Instead, it imploded into bureau-corporatism, where resources created by coalface workers are redistributed by bureaucrats in government and large (exponentially expanding) private organisations. These bureaucrats are not interested in cost-savings and efficiency. It is not t h e i r money they are spending. In fact, the more they can squeezed out of their head-office or the government, the longer they can keep their jobs. The more mess they make, the more likely it is they will get asked to clean it up. Just call the mess 'operational issues' and the clean-up 're-structuring' and you have a guarantee of ad infinitum employment. To the detriment of coalface workers who, as a result, end up having more work to do but fewer jobs to go into.

OLDFART:

13 Mar 2014 12:32:54pm

I wonder what the ratio of welfar to the needy is in comparison to the money handed out to corporation in the form of tax breaks etc. do you think Gina and co would quietly take the withdrawal of corporate handouts by government?

NotMyName:

13 Mar 2014 2:00:33pm

When Friedrich Hayek thought about and eventually wrote The Road To Serfdom, it was a time before the asset strippers of the great capitalist empire scavenged what they could out of bankrupt UK and Europe after WWII, this was also before speculation was allowed to create great fortunes for the few at the expense and security of the rest of us. Would or did Hayek regard the Marshal Plan or Roosevelt's New Deal as collective interference? During the great depression, those with the private capital in the US kept it for themselves. The collapse of collective cohesion in the US resulted in workers wages in the US in real terms to have stagnated since the 1960's, many in the US work five days and still go home in poverty. The political parties who abhor collectivism in the workplace are slowly turning the greater population of the world into serfs without any care for their health, housing or basic needs. Like politics, commerce concentrates on the moment; politicians are blinkered to the winning the next election, not on the best outcome for the nation; commerce is profit at any costs, has there ever being a time when some of the largest banks have been found to be responsible for laundering drug cartels' money, and if their defence is they didn't realise who their clients were, the vast amounts of money should have been a hint. So stating that Hayek's book The Road To Serfdom today is relevant and that government interference the road to ruin, why has a long period of government disengagement in regulating the markets, and unrestrained capitalism brought the world to the GFC, which still could bring about a collapse that will give us an opportunity to experience what is was like during the great depression.

GJA:

13 Mar 2014 2:36:13pm

Economic theories are all well and good, but some economists rely on more than theory. They use case studies, too. According to Jeff Madrick, writing in this months' Harpers, in consideration of such government intervention as the minimum wage, empirical studies show increases in the minimum wage bring about higher wages and more demand, increasing economic growth and job creation.

Aaron:

13 Mar 2014 2:42:37pm

Although I fear I am far too late for this comment to ever be read by anyone, I'll throw my two cents in.

Ms Novak, I think you should review recent work on the welfare effects of redistribution - in particular a 2011 IMF paper by Berg and Ostry which finds that more equitable income distributions are associated with higher levels of economic growth. Or, to put it another way, if the rich contribute more of their income to society, and the poor get more support from society, everybody is better off.

I'll repeat that, because its important.

Everybody is better off.

This finding is backed up by many other papers. I am not aware of any paper that finds negative economic effects of redistribution (within sensible bounds at least, 'sensible' implying 'currently extant in the developed world').

While I'm all for Hayek's notion of liberty rather than liberties (one I hope you are familiar with), that has to be read within a context of existing within a society and having responsibility not just to yourself, but to others within your society, whether you know them or not.

The state, even according to Hayek, retains a monopoly on coercive force, and benefits everyone by using that power to ensure greater income equality.

NotMyName:

13 Mar 2014 3:33:49pm

Hello Aaron you are correct society should have a responsibility for others in society, but when those in power, and those with the money applaud and support politicians like Margaret Thatcher, who didn't believe in society, and couldn't understand why members of the House of Lords blocked or slowed down her excesses due their Lordships considering it their and their predecessors to have a duty to protect British society. Political thinkers, tax dodgers, and others with selfish self-centred interest, who believe in the false claim of trickle down wealth to all in society, don't consider the consequences of cutting taxes, when a government is faced with lack of funds it cuts cost by reducing revenue to important offices like the Police, cuts to the Police budget means less police on the streets, mostly in areas of high unemployment; in a society where we are bombarded everywhere and in the media that life isn't complete unless we have the latest consumer desirable, it's not surprising when we have high unemployment, low Police presence we haave higher levels of crime and violence, this is due to people feeling they are not part of society. In the end the cost to the exchequer will be higher and everyone should be responsible.

Right Said Fred:

13 Mar 2014 2:57:21pm

It has been a while since I read any Hayek but I do recall even he was in favour of social welfare systems and insurances. I also recall the Ayn Rand that neoliberal beloved Homer Simpson amongst wannabe economists was happy to accept welfare.But then neither of them were being obliged to depend on the welfare of billionaires looking for a credibility club to launch rent seeking from, which afforded them a leeway into reality. Any ideology when taken to religious extremes begins to parody itself. Some of us can remember when the loony left produced schoolboy howlers from Marxists dictates, well it seems we have finally arrived at the same point with liberalism" our journey toward the final hellish destination on the road to serfdom." indeed !

graazt:

Sure Hayek made some good points that are still relevant. As did Friedman. As did Keynes. As did Smith. As did.... Marx.

If 5 families own the planet's wealth and everyone else is merely subsisting, how are consumer's going to buy things, and therefore keep companies in business?

Recycling Austrian School ideology is all well and good, but really, the zeitgeist has been with Hayek, Thatcher et al for the last 30 years.

Just more of the same because it's working OK? Despite growing wealth disparity and a potential existential crisis threatening all forms of economic activity?

Ah the IPA. Arguing that old things are bad by virtue of being old one day, and that they're good the next.

Working for $2 a day in a mine is serfdom for all intents and purposes Dr Novak. We can't all be professional propogandists. Someone has to do some useful work to underpin all the parasitic politico-economic advocacy after-all.

Kerry:

13 Mar 2014 3:33:39pm

The welfare entitlement mentality is part of big business. It has to be. If not why is it that every retirement superannuation seminar and investment adviser brochure advertises "strategies for self funded retirees to qualify for Centrelink benefits like the old age pension and health care cards.Julie just so we can test your statements, how about providing the statistics showing how many self funded retirees are getting age pension top ups and health care cards whilst having investments and investment income sources quarantined from the Centrelink assessment process. The government has quarantined the old age pension from the review because of the massive number of otherwise very affluent self funded retirees that have "structured their affairs to qualify". I don't pay taxes for politicians to fly from one side of the country on a pretext to look at prospective investment properties. Nor do I pay taxes for otherwise wealthy and affluent people to rip the system off because they believe that they are entitled. I pay taxes to support our security and defence, health, education and other social programs as well as appropriate business incentives.Welfare should be a safety net not an entitlement that otherwise affluent individuals believe is their entitlement.When the government starts and the IPA and you as an individual starts putting everything on the table for review and discussion including "wealthy age pension top ups" then your articles and views might have some merit.

Kropotki:

why is the far-right IPA allowed to spout their propaganda nonsense on the ABC, yet I've never seen an article here from the Far-Left? (and I assume they have been submitted quite often since)

What gives the IPA, what is essentially a corporate propaganda and brainwashing outlet, the right to post their things all over the ABC, while we never even see a representative from say the Socialist Alternative? (who run one of the biggest political conferences in the country every year)